Chamber of Digital Commerce Supports Kraken in Legal Battle with SEC
In a significant development in the US cryptocurrency regulation landscape, the Chamber of Digital Commerce has expressed its support for Kraken amidst the exchange’s ongoing legal dispute with the Securities and Exchange Commission (SEC). The Chamber of Digital Commerce filed a court document on February 27 stating that the SEC’s lawsuit against Kraken poses a threat to the growth and success of the blockchain community and crypto companies like Kraken that have made genuine efforts to comply with laws.
Kraken’s Legal Challenge against the SEC
The SEC filed a lawsuit in November 2023 accusing Kraken of unlawfully facilitating the buying and selling of crypto asset securities since September 2018. The federal agency alleges that Kraken made hundreds of millions of dollars through these activities. In response, Kraken filed a motion to dismiss the lawsuit, arguing that it sets a dangerous precedent for regulatory overreach.
SEC’s Regulation-by-Enforcement Approach
The SEC has faced criticism for its approach of enforcing regulations through lawsuits against crypto firms. Coinbase is currently engaged in a similar legal battle with the SEC regarding the classification of tokens sold on its platform. The Chamber of Digital Commerce argues that the SEC’s aggressive regulatory power could lead organizations to abandon blockchain technology or shift operations outside of the US to avoid compliance burdens.
Chamber of Digital Commerce’s Amicus Curiae Brief
The Chamber of Digital Commerce, known as the world’s leading blockchain and digital asset trade association, filed an amicus curiae brief to support Kraken in its legal battle with the SEC. The brief emphasizes that the SEC’s lawsuit threatens the sustained growth and success of the trillion-dollar blockchain community and millions of participants in crypto markets. It also highlights that crypto companies like Kraken have made genuine efforts to comply with federal and state laws as they innovate in the transformative industry.
Reaction from Kraken
Kraken CEO Jesse Powell criticized the SEC, referring to them as “masochists” seeking a second round of legal action against the exchange. He also mentioned Kraken’s $30 million settlement with the SEC in February 2023 for their crypto staking-as-a-service program. Kraken CEO Dave Ripley expressed disagreement with the SEC’s claims and stated that the company does not list securities.
Chamber of Digital Commerce’s Role in Promoting Crypto Adoption
The Chamber of Digital Commerce, comprising over 200 participants in the global blockchain industry, aims to advance the adoption of cryptocurrencies. As a leading trade association, it advocates for blockchain technology and digital assets on behalf of its members. The Chamber’s support for Kraken in its legal battle with the SEC aligns with its mission to promote and protect the interests of the blockchain community.
Hot Take: Chamber of Digital Commerce Stands Up Against SEC’s Lawsuit
The Chamber of Digital Commerce has taken a stand by filing an amicus curiae brief in support of Kraken, arguing against the SEC’s lawsuit. This move highlights the growing concern within the crypto industry about regulatory overreach and its potential negative impact on innovation and growth. The outcome of this legal battle will have significant implications for both Kraken and the broader blockchain community. It remains to be seen how the court will interpret and decide on this complex case, but it is clear that organizations like the Chamber of Digital Commerce are actively working to protect the interests of crypto companies and promote a favorable regulatory environment for blockchain technology.
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