ShapeShift has opted for a plea deal with the SEC, over accusations of being a dealer of unregistered crypto securities. The exchange will pay $275,000 as a civil penalty.

ShapeShift: the crypto-exchange and the settlement with the SEC for the sale of unregistered securities

ShapeShift offers to settle with the US Securities and Exchange Commission (SEC), over allegations of being a unregistered securities dealers. The decision arrives after the SEC ordered the crypto-exchange to cease operations.

In one document, the US SEC cites a 1946 court case that led to the Howey test, and writes the following:

“Cryptocurrency assets offered by ShapeShift included those offered and sold as investment contracts and, therefore, securities”

Not only that, with this rationale, the regulatory authority would also submit a cease and desist action against cryptocurrency company ShapeShift.

The crypto-exchange then offered the plea deal, which was accepted by the SEC. The agreement provides that ShapeShift to pay a civil penalty of $275,000 and that he/she stays away from any future violations of security regulations.

ShapeShift: another crypto-exchange accused by the SEC for selling unregistered securities

Founded by Erik VoorheesShapeShift operated in Colorado from October 2017 to February 2020, before shutting down its direct cryptocurrency trading platform in 2021. Now the company is registered in Switzerland.

This case of ShapeShift and the SEC charges for selling unregistered securities adds to other controversies with other crypto companies.

First, there is something to consider the never-ending case of Ripple vs. SEC which had achieved a major breakthrough on July 14, 2023, when the judge ruled that XRP is not a security. Not even 10 days later, however, the SEC applied for appeal, which was accepted a month later by the Court, but rejected in October 2023.

In practice, the SEC has failed to demonstrate the existence of relevant legal issues or substantial reasons for difference of opinion, always on the same issue: crypto and securities.

If we talk about crypto-exchanges, then, there is the case of Coinbase vs. SEC. It was June 6, 2023, when the US SEC, after attacking Binance, would have officially sued also Coinbase.

Here too, among the various accusations, Coinbase began to struggle on the crypto and security issue, having to temporarily cancel its offer of some tokens targeted by the SEC.

The case of Kraken

In addition to ShapeShift, Ripple, Coinbase and Binance, also the crypto-exchange of Kraken was targeted by the SEC.

And in fact, the investigation against Kraken has always concerned the sale of unregistered securities and its staking service, and already in February 2023 it seems it had reached an agreement with the US SEC.

PracticallyKraken had to close its crypto staking operations following a requested charge by the SEC. It’s about a fine of 30 million dollars.

Recently, however, Kraken he rejected another lawsuit brought by the SEC, calling it a “worrying precedent” of excess authority.


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