The Commodity Futures Trading Commission (CFTC) on Tuesday ordered crypto exchange Kraken to pay a $1.25 million fine for illegally offering certain products.
The agency said Kraken was fined for offering transactions in digital assets, including Bitcoin, to ineligible customers between June 2020 and July 2021. The order also stated that the company did not register as a futures broker (FCM).
In the CFTC executive order, acting executive director Vincent McGonagle said, “This action is part of the CFTC’s broader effort to protect US customers.” said and added:
“Trading in margin, leveraged or funded digital assets available to retail US customers must take place on registered and regulated exchanges in accordance with all applicable laws and regulations.”
Kraken is one of the largest cryptocurrency exchanges in the world. The sanction action is quite small compared to the size of a large crypto exchange like Kraken (the company is estimated to be worth $10 billion, with the fine representing 0.0125% of that value). In response, crypto derivatives exchange BitMEX also agreed to pay fines of up to $100 million in a lawsuit filed by the CFTC and the Financial Crime Prevention Network (FinCEN).