Cryptocurrency exchange Kraken is reportedly being probed by the United States Securities and Exchange Commission (SEC) over whether it breached rules around the offering of securities. 

According to a Feb. 8 Bloomberg report, the probe relates to certain offerings that Kraken has made to U.S. clients. A person with knowledge of the matter said the probe is at an advanced stage and could reach a settlement in the coming days.

However, at this stage, it is not clear which offerings are being scrutinized by the securities regulator.

When asked about the alleged probe, an SEC spokesperson told Cointelegraph, “The SEC does not comment on the existence or nonexistence of a possible investigation.”

Kraken did not immediately respond to a request for comment.

Gensler said in Dec. 2022 that his main goal for regulating crypto throughout 2023 was to make crypto exchanges and lending platforms come into compliance, which he suggested can occur through firms registering with the SEC or through enforcement actions.

Related: Judge dismisses proposed class-action suit alleging Coinbase securities sales

Kraken CEO Dave Ripley argued in Sep. 2022 that he didn’t see a need to register Kraken as an exchange with the SEC, because it does not offer securities, adding “There are not any tokens out there that are securities that we’re interested in listing.”

SEC Chairman Gary Gensler has repeatedly said, however, that he considers most cryptocurrencies other than Bitcoin (BTC) to be securities.

The SEC however recently conceded during a Jan. 30 appeal hearing in the LBRY v SEC case that the sale of LBRY Credits (LBC) in the secondary market doesn’t constitute a security, after the judge was persuaded by an argument from attorney John Deaton highlighting that the courts had never deemed the underlying asset to be a security in similar cases.

The regulator often refers to the “Howey Test” to determine what constitutes a security. The name comes from the SEC v Howey case from 1946 which set a precedent in the U.S. for what transactions are considered securities.

It held that a transaction qualifies as an investment contract — and therefore is considered a security — where there is an investment in a common enterprise with profits earned exclusively through the work of others.