Kraken Fined $1.25 Million for Offering Illegal Bitcoin Products

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(Bloomberg) -- Kraken will pay a $1.25 million fine to settle allegations that it let U.S. residents illegally trade margin products linked to Bitcoin and other cryptocurrencies.

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From about June 2020 to July 2021, Kraken allowed transactions that are supposed to be off limits to U.S. traders, the Commodity Futures Trading Commission said in a Tuesday statement. The crypto exchange also failed to register as a futures commission merchant, the regulator said.

“Margined, leveraged or financed digital asset trading offered to retail U.S. customers must occur on properly registered and regulated exchanges in accordance with all applicable laws and regulations,” said Vincent McGonagle, the CFTC acting enforcement director.

Kraken settled the CFTC’s claims without admitting or denying them. The agency noted Kraken’s cooperation in accepting the settlement.

In a statement, Kraken said it appreciated that the CFTC acknowledged its cooperation with the investigation. The exchange also said it’s committed to working with regulators to ensure rules for digital assets create a level-playing field for traders globally.

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