In a heated showdown with the US Securities and Exchange Commission (SEC), Kraken has hit back at the agency’s recent communication with a forceful response, standing firm on its request to dismiss the case.
What unfolded? Read on to find out!
Clarifying Terms and Allegations
Kraken’s latest move calls out the SEC for failing to specify any particular investment contracts traded on its platform and for using confusing terms like ‘Investment Concepts’ and ‘Ecosystem’ instead of the more appropriate ‘Investment Contracts’ and ‘Enterprise’. This highlights a fundamental disagreement on the nature of the alleged misconduct.
The exchange underscores the SEC’s lack of precision in its accusations, with Kraken arguing that the provided explanation falls short of addressing the core issue of identifying specific investment contracts.
A History of Legal Clashes
This latest development follows the SEC’s November 2023 charges against Kraken for allegedly running its crypto trading platform without proper registration. The SEC claims this deprived investors of necessary protections, a move seen as prioritizing profits over investor safety. Similar actions have been taken against major industry players like Binance and Coinbase, suggesting a broader regulatory crackdown on the crypto space.
We’re Back to Labels Again!
Kraken has argued that the cryptocurrencies in question should be treated as commodities, not securities. This stance was reported by Coindesk. In response, the SEC reiterated its authority granted by Congress and the use of the Howey Test to determine registration requirements for investment contracts.
Kraken’s legal team is pushing for the dismissal of the SEC’s claims to avoid significant changes to US financial regulations. This plea, outlined in a court filing submitted on Thursday, highlights the potential impact on the wider industry. The case is slated to be heard by Judge William H. Orrick on June 12.
Also Check Out: XRP Lawsuit: SEC’s Case Weakening? Ripple Fights Back with Binance Ruling
Who are you siding with in this crypto clash: Kraken or the SEC?
