The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit accusing San Francisco-based cryptocurrency exchange Kraken of breaking federal securities laws by operating without proper registration as a broker, clearing agency and dealer.

Leading cryptocurrency exchange Binance is facing a potential $4 billion fine from the U.S. Department of Justice as part of a deal to end a years-long probe into the trading platform.

Liechtenstein-based cryptocurrency trading platform Bittrex Global has announced it will shut down its operations and end all trading on its platform by December 4 in the wake of several regulatory hurdles that made it harder to run its business.

Top stories in the Crypto Roundup today:

• SEC Charges Kraken with Securities Law Violations and Commingling Customer Funds
• Binance Faces $4 Billion Fine in U.S. to End Criminal Case
• Crypto Exchange Bittrex Global Shuts Down After SEC Settlement
• CME Options Volume Skyrockets in October as Crypto Volatility Returns

SEC Charges Kraken with Securities Law Violations and Commingling Customer Funds

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit accusing San Francisco-based cryptocurrency exchange Kraken of breaking federal securities laws by operating without proper registration as a broker, clearing agency and dealer.

The SEC also accused Kraken of creating a “significant risk” by mixing its own corporate assets with up to $33 billion worth of customer crypto, citing Kraken’s independent auditor.

Per the lawsuit, Kraken at times held “more than $5 billion worth of its customers' cash, and it also commingles some of its customers' cash with some of its own.” It adds that Kraken has “at times paid operational expenses directly from bank accounts that hold customer cash.”

The SEC also named several tokens that it considered to be unregistered securities, such as Algorand’s ALGO, Polygon’s MATIC and NEAR, and said that Kraken actively marketed these tokens to the investors. The filing asks to permanently ban Kraken from operating as an unregistered exchange.

Kraken has responded that it disagrees with the SEC’s complaint and stands firm in its view “that we do not list securities and plan to vigorously defend our position.”

The company criticizes the SEC for urging crypto exchanges to register without clear legal backing or guidelines for registration and noted it has long advocated for effective U.S. market regulation tailored to the unique aspects of cryptocurrencies, favoring Congressional action for regulatory clarity. In a blog post, Kraken says that the SEC’s complaint “concedes that this so-called “commingling” is no more than Kraken spending fees it has already earned.”

Kraken added it views the SEC’s approach of regulation through enforcement as harmful to consumers, innovation, and the global competitiveness of the U.S. Earlier this year, the SEC settled charges tied to Kraken’s staking service.

Binance Faces $4 Billion Fine in U.S. to End Criminal Case

Leading cryptocurrency exchange Binance is facing a potential $4 billion fine from the U.S. Department of Justice as part of a deal to end a years-long probe into the trading platform.

Discussions are ongoing between the Justice Department and Binance, considering the potential for founder Changpeng Zhao to be criminally charged in the U.S. as part of a deal to settle accusations of money laundering, bank fraud, and sanctions violations.

While the situation remains uncertain, people familiar with the situation suggest a decision could be made by the end of the month. It’s not clear what a final deal and charges would look like, but Binance would probably have to pay over $4 billion in a deal that aims to allow Binance to continue operating.

Binance’s legal troubles crippled its US subsidiary, with Binance.US seeing its CEO depart in September amid widespread job cuts that saw it reduce its workforce by roughly a third. The exchange also saw trading volumes plunge and lost banking partnerships, which led to the suspension of US dollar deposits.

The exchange was also accused by the U.S. Commodity Futures Trading Commission (CFTC) in March of consistently violating derivatives regulations. Binance has contested these lawsuits and doesn’t agree with how many of the issues were characterized.

Addressing the SEC’s filing, Binance said it was an attempt to regulate “with the blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology.”

Crypto Exchange Bittrex Global Shuts Down After SEC Settlement

Liechtenstein-based cryptocurrency trading platform Bittrex Global has announced it will shut down its operations and end all trading on its platform by December 4 in the wake of several regulatory hurdles that made it harder to run its business.

These regulatory hurdles included the shutdown of its U.S. branch earlier this year after a $29 million settlement with the SEC over claims it broke securities laws. As the firm winds down, customers will only be able to withdraw their funds from the platform.

The trading platform’s 24-hour trading volume ahead of the shutdown was below the $6 million mark, while Coinbase, in comparison, saw over $1.8 billion in volume over the last day, and leading exchange Binance saw over $7 billion.

CME Options Volume Skyrockets in October as Crypto Volatility Returns

The trading volume of options on the CME experienced a substantial increase in October, with BTC options and ETH options reaching new record highs. Specifically, BTC options surged by 142% and ETH options by 107%, achieving trading volumes of $1.75 billion and $532 million, respectively.

These surges came in a month that saw the combined trading volume of centralized spot and derivatives exchanges rise 53% to $1.57 trillion as volatility returned to the cryptocurrency space.

Dig deeper into the world of cryptocurrency trading with CCData’s latest Exchange Review report.

State of the Crypto by Top Tier Exchange Volume

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