According to recent reports, the U.S. Securities & Exchange Commission (SEC) has opened an investigation into the crypto exchange Kraken to see whether or not it has violated any regulations pertaining to the sale of securities.  A Bloomberg article from states that the investigation concerns Kraken’s offers to its American customers. According to a source familiar with the investigation, a resolution is possible within the next few days. However, it is still unclear which offers the securities regulator is examining.

SEC Remains Silent on Possible Probe into Crypto Exchange Kraken

A representative for the SEC said the agency would not remark on whether or not an inquiry was underway. They responded to the media in question. In December 2022, Gensler stated that business registration with the commission or regulatory proceedings will be his primary means of enforcing compliance among crypto exchanges and borrowing platforms during 2023.

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Moreover, in September 2022, Kraken CEO Dave Ripley said, they’re not any coins available that are securities that they are keen on listing. He answered a question about whether or not Kraken should go for as just an exchange that is registered with the SEC.

SEC Concedes LBRY Credits Not a Security in Court Hearing

Gary Gensler has made it clear on several occasions that he considers all cryptocurrencies to be securities except Bitcoin. The Securities and Exchange Commission (SEC) conceded during a court hearing on January 30 in the LBRY v. SEC lawsuit that the purchase of LBRY Credits did not meet the requirements to be considered a security. This admission came after attorney Deaton successfully argued in court. Moreover, he said that courts have never judged the underlying security to be secure in previous situations.

The Howey Test is often used by regulators to determine the range of activities that may be categorized as security. The precedent for the designation of some monetary transactions as securities in the United States was established by the case Securities and Exchange Commission v. Howey (1946). It is where the name security comes from. Moreover, it came to the conclusion that an agreement to invest in a firm in which the rewards are earned purely through the efforts of others was necessary. Furthermore, it satisfies the conditions for a contractual obligation and, as a result, is considered a security.