Kraken Fights Back Against SEC Lawsuit, Citing Dangerous Precedent
Cryptocurrency exchange Kraken has filed a motion to dismiss the Securities and Exchange Commission’s (SEC) lawsuit, arguing that allowing the case to continue would establish a “dangerous precedent.” The SEC alleged that Kraken’s parent companies operated its trading platform as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken denies the claims and asserts that the SEC’s argument is flawed as a matter of law. The exchange emphasizes that there is no “investment contract” between buyers on Kraken and token issuers. In response to the lawsuit, Kraken has vowed to vigorously defend its position.
SEC Lawsuit Allegations
- The SEC claims that Kraken facilitated the buying and selling of crypto asset securities unlawfully.
- The commission seeks injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains, interest, and penalties.
- Kraken settled with the SEC for $30 million in February and agreed to stop offering or selling securities through crypto asset staking services or programs.
Kraken’s Defense
- Kraken argues that the SEC’s case sets a dangerous precedent for agency overreach.
- The exchange maintains that the SEC fails to provide evidence of any “contract” between buyers on Kraken and token issuers, rendering the claim of an “investment contract” invalid.
- Kraken criticizes the SEC for relying on ambiguity and contradiction instead of establishing a clear legal basis for its actions.
Jesse Powell’s Criticism of US Regulators
In November, Jesse Powell, co-founder of Kraken, criticized US regulators, particularly the SEC, accusing them of attacking American crypto companies and forcing them out of the country. Powell claimed that the SEC’s unclear rules and registration process make it difficult for crypto companies to comply.
🔥 Hot Take: Kraken Fights for Crypto Industry
Kraken’s motion to dismiss the SEC lawsuit marks a significant step in the ongoing battle between cryptocurrency exchanges and regulatory authorities. By challenging the SEC’s jurisdiction and highlighting the lack of clarity in regulations, Kraken aims to protect its operations and set a precedent for other crypto companies. The outcome of this case will have far-reaching implications for the future of the crypto industry and its relationship with regulators. As a crypto enthusiast, you should closely follow this legal battle as it unfolds.
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