The SEC's complaint alleges that Kraken's practices

Including deficient internal controls, poor recordkeeping, and commingling customer funds and crypto assets with its own, pose significant risks and potential loss to its customers.

The SEC has charged Kraken for operating as an unregistered securities exchange, broker, dealer, and clearing agency, alleging violations of the 1934 Securities Exchange Act and seeking remedies including injunctions, disgorgement of gains with interest, and penalties.

SEC has charged Kraken for operating as an unregistered securities exchange in offering 16 crypto securities such as Solana, Cardano & Algorand.