Kraken Fights Back Against SEC Lawsuit, Joining Binance and Coinbase
Cryptocurrency exchange Kraken has filed a motion to dismiss the US Securities and Exchange Commission’s (SEC) lawsuit against the firm, which accuses Kraken of operating as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken is joining other major exchanges, Binance and Coinbase, in fighting against the SEC’s allegations.
Kraken Argues SEC Overreach and Seeks Dismissal
Kraken has made a motion to dismiss the SEC’s lawsuit, stating that the agency lacks the authority to regulate all speculative investments. The exchange argues that the SEC’s complaint does not claim any fraud or consumer harm and is solely based on the registration of crypto tokens as investment contracts. Kraken also asserts that Congress should play a role in regulating the crypto industry and that the SEC’s jurisdiction should be limited in favor of other agencies.
SEC Alleges Mishandling of Customer Information
In addition to the unregistered securities exchange allegations, the SEC claims that Kraken mishandled customer information. It accuses Kraken of commingling customer funds and using customer cash to pay operational expenses, as well as commingling customer crypto assets with its own. The regulator argues that this puts customers at risk of loss and highlights Kraken’s flawed business practices and internal controls.
Hot Take: Kraken and Others Push Back Against SEC’s Power
Kraken’s motion to dismiss the SEC’s lawsuit is part of a broader pushback against the SEC’s regulatory actions in the cryptocurrency industry. Binance, Binance US, and Coinbase have also filed similar motions, challenging the SEC’s jurisdiction and authority. This legal battle highlights the ongoing debate over how cryptocurrencies should be regulated and who should have the power to oversee the industry. As a crypto enthusiast, it’s important for you to stay informed about these developments and understand the potential impact on the crypto market.
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