Kraken Fires Back at SEC Lawsuit, Citing Ripple Case
Kraken, the second largest cryptocurrency exchange in the US, has responded to the lawsuit filed by the United States Securities and Exchange Commission (SEC) against the platform. The exchange argues that the SEC has failed to establish a direct connection between coin issuers and buyers, which the commission refers to as “crypto asset securities.” Kraken cites a summary of the SEC v. Ripple document, which highlights five reasons demonstrating the lack of connection between issuers and buyers. The exchange specifically refutes the SEC’s claim that assets like Algorand, Cardano, and Polygon are securities. Kraken believes that these token issuers do not meet the typical requirement of an investment contract.
Legal expert Bill Morgan shared this information on social media and pointed out that Kraken’s stance could pose a significant obstacle to the SEC’s case against Ripple. If Judge Analisa Torres’ summary judgment decision in the Ripple case stands, it may make it harder for the Commission to reach a settlement with Ripple.
Kraken Files Motion of Dismissal
Kraken has taken a crucial step in its legal dispute with the SEC by filing a motion of dismissal. The exchange has asked the Northern California Court to dismiss the Commission’s claims that it operates as an unregistered securities platform, dealer, broker, and clearing agency. A spokesperson from Kraken stated that the SEC’s case is based on a “comprehensive new theory” that would securitize various commodities and assets. The spokesperson argues that this action would grant the SEC significant power over the US economy. Congress is currently discussing how these powers should be distributed among government agencies.
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