Kraken, a U.S.-based cryptocurrency exchange, has taken a stand for user privacy amidst legal proceedings demanding disclosure of private XRP transaction data, including customer identities. Giving priority to user confidentiality over regulatory compliance, Kraken filed a motion to protect its clients’ sensitive information, emphasizing the exchange’s dedication to maintaining user trust.
Following the news, Kraken has started notifying customers who could benefit from the Zakinov v. Ripple lawsuit.
Zakinov v. Ripple: What’s the Issue?
At the core of this legal battle is classifying XRP as either a security or a currency. However, the plaintiff, Zakinov, alleges that Ripple marketed XRP as an unregistered security. Conversely, Ripple contested that XRP should be considered similar to cryptocurrencies like Bitcoin and Ethereum. Despite Ripple’s efforts to contest the lawsuit, it is yet another looming legal challenge, with U.S. District Judge Phyllis J. Hamilton certifying it as a class action.
On July 13, Ripple won the lawsuit against the SEC, marking it as the first-ever case in US history. The court’s ruling declared that XRP is not a security, dismissing the SEC’s argument that crypto tokens inherently fall under securities regulations. This decision itself is a precedent for how digital tokens are classified and regulated in the United States.
Kraken’s Involvement Creating Yet Another FOMO In Market
Notably, Kraken has reached out to its customers, particularly those who may stand to benefit from potential monetary incentives resulting from the lawsuit. Yassin Mobarak, founder of Dizer Capital, shared the news on social media, revealing that Kraken had informed him about being on the list of potential beneficiaries eligible for the lawsuit’s monetary incentives.
Mobarak expressed his surprise at the prospect of making money from his XRP holdings through a class action against Ripple, a scenario he had not anticipated despite his belief in the profitability of his XRP investments.
Ripple in response
Ripple is expected to bolster its defense in the Zakinov lawsuit by citing Judge Torres’ ruling in the SEC case, which affirmed that XRP is not a security. Meanwhile, the trial for the Zakinov lawsuit is scheduled for October 2024. It will be interesting to see what direction this case takes after financial documents open. Stay tuned with us for more updates.