(Bloomberg) -- The US Securities and Exchange Commission accused crypto exchange Kraken of securities-law violations, less than a year after unveiling a $30 million settlement with the firm over other alleged conduct.

In its latest salvo against the crypto sector, the regulator claimed Monday that Kraken commingled customer assets with its own and at times paid expenses from bank accounts that held customer cash. 

The SEC also argued that the firm was operating as an exchange, broker, dealer and a clearing agency — all without the proper registration. The agency has sued the Coinbase and Binance digital-asset platforms for similar alleged failures, accusations both companies dispute.

“We allege that Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws,” Gurbir Grewal, the SEC’s enforcement chief, said in a statement. “That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk.”

$43 Billion Revenue

In 2020 and 2021 combined, Kraken had more than $43 billion in revenue from trading-based transactions, the complaint alleged.

In a post on X, formerly known as Twitter, Kraken said it disagreed with the SEC claims and planned to “vigorously defend” its position.

“The SEC has repeatedly challenged crypto exchanges to come in and register without a single law supporting their position and no clear path to registration,” Kraken wrote.

The exchange said that the latest developments don’t affect its product offering and added that the company will “continue to provide services to our clients without interruption.”

The lawsuit, filed in federal court in San Francisco, is separate from the regulator’s February settlement with Kraken. In that order, Kraken paid $30 million to settle SEC allegations that the firm’s staking service was an illegal sale of securities, and agreed to end the service in the US.

Gensler’s Crackdown

The SEC under Chair Gary Gensler contends that crypto exchanges and many digital tokens fall under its regulatory purview. The agency has pursued numerous enforcement actions against industry players, catalyzed by the risks exposed by the bankruptcy of Sam Bankman-Fried’s FTX exchange. Gensler has repeatedly argued that crypto is rife with fraud and misconduct.

In the Kraken complaint, the regulator lists a range of tokens and claims those assets are securities, as it did in the lawsuits against Coinbase and Binance.

The SEC recently suffered some setbacks in crypto cases. Ripple Labs Inc. earlier this year won a partial legal victory over the agency on whether the XRP token is a security. Last month, a US federal appeals court formalized a win for Grayscale Investments LLC in its bid to create a spot Bitcoin exchange-traded fund over objections from the SEC.

Crypto markets were steady in Asia-Pacific trading on Tuesday following the SEC’s lawsuit against Kraken. The prospect of a resolution of the US Justice Department’s probe into Binance had spurred a rally in larger tokens like Bitcoin, Ether and BNB on Monday but the climb later moderated.

Bitcoin, which has more than doubled this year in a partial rebound from the 2022 crypto rout, was trading at $37,532 as of 9:41 a.m. in Singapore.

(Updates with comment from Kraken from the sixth paragraph.)

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