In the ongoing legal saga between Kraken and the US Securities and Exchange Commission (SEC), the crypto exchange launched a broadside with a new filing arguing that the agency’s case was not properly drafted.
In the ongoing legal saga between Kraken and the US Securities and Exchange Commission (SEC), the crypto exchange launched a broadside with a new filing arguing that the agency’s case was not properly drafted.
Kraken submitted a response on Thursday to the SEC’s April letter regarding the company’s motion to dismiss the case. The exchange argues that the SEC’s argument lacked precision as it did not specify any tradable investment contracts on Kraken.
Instead of using the terms “investment contract” and “enterprise,” the SEC opted for phrases like “investment concept” and “ecosystem” throughout its argument, according to Kraken’s filing.
The SEC’s position, as outlined in its April filing, defends its choice of language by asserting that the law’s reach extends beyond conventional interpretations. This position was supported by case law, the SEC argued.
Last November, the SEC charged Kraken with operating as an unregistered broker, dealer, exchange, and clearing agency. The SEC complaint also alleges that Kraken has been illegally facilitating the buying and selling of cryptoasset securities since at least September 2018, making hundreds of millions of dollars in the process.
Kraken, under its parent company Payward Inc., had previously settled charges brought by the SEC against its betting business in February 2023.
As the case progresses, the crypto community watches with bated breath. Kraken’s challenge to the SEC’s drafting is more than a legal argument; It is a stance against what the exchange sees as an excessive extension of regulatory power.
The outcome of the Kraken case could have major implications for how crypto exchanges operate and how digital assets are classified and regulated in the United States in the future.
