The CFTC said the penalty was one of the measures it was taking to protect US investors
Kraken, one of the leading cryptocurrency exchanges in the US, has been fined by the Commodity Futures Trading Commission (CFTC) for offering unregulated crypto investment products.
According to an order issued by the CFTC on Tuesday, September 28, Kraken illegally offered US customers access to crypto products, violating regulatory guidelines.
“The CFTC’s order notes that from approximately June 2020 to July 2021, Kraken offered margined retail commodity transactions in digital assets to U.S. customers who were unlicensed contractors”the regulator said in a press release.
The CFTC said that the exchange had failed, “register as a Futures Commission Merchant (FCM)”, and that it had suspended users from trading in shots, which was contrary to the requirements of the US commodity markets.
Kraken must therefore pay a fine of $ 1.25 million and “refrain from further violations of the Commodity Exchange Act (CEA)”the Commission continued.
According to CFTC Director Vincent McGonagle, the crackdown on Kraken is part of the regulator’s mandate to protect US customers. He added that any company or exchange provider that wants to offer trading in margin or leverage must ensure that they are registered and that all products are regulated as required by law.
Kraken has reached an agreement with the CFTC, and the crypto platform is expected to pay the required fine within 30 days.
The exchange is also reportedly seeking further cooperation with the regulator to ensure regulatory compliance as well as clarity in this area.
According to a report by CoinDesk, Kraken will not seek judicial review of the matter.