Kraken, one of the leading cryptocurrency exchanges, is facing an investigation by the U.S. Securities and Exchange Commission (SEC) over allegations of offering unregistered securities to American clients.

According to a recent Bloomberg report, the investigation has reached an advanced stage and a settlement could be reached soon.

The investigation centers on the concern that securities, which are considered higher-risk due to the lack of regulatory oversight, were offered to American clients.

Despite calls from the SEC chairman Gary Gensler for crypto platforms to register with the regulator, Kraken’s new CEO, Dave Ripley, has declined to do so.

This is not the first time that Kraken has had run-ins with regulators. Other major cryptocurrency exchanges, such as Binance, have also faced repercussions for trading unregistered securities.

The outcome of the investigation is yet to be determined and could lead to fines, penalties, or other punishments if the SEC finds violations of securities laws.

The cryptocurrency market has been under increasing regulatory scrutiny in recent years as regulators aim to protect investors and ensure the stability of financial markets.