TL;DR
- Kraken defies SEC lawsuit, alleges dangerous precedent.
- SEC accuses Kraken of operating without registration; the exchange denies and seeks to dismiss.
- Kraken reaches $30 million settlement with SEC as it defends its position.
Kraken, a prominent cryptocurrency exchange platform, is at the center of a legal dispute with the United States Securities and Exchange Commission (SEC).
The SEC filed a lawsuit in November, alleging that Kraken‘s parent companies were operating its cryptocurrency trading platform without being registered as a stock exchange, broker, dealer or clearing agency.
In response, Kraken has filed to dismiss the lawsuit, arguing that allowing it to continue would set a “dangerous precedent.”
The platform denies the SEC’s allegations and notes that the lawsuit is based on registration arguments related to the nature of cryptocurrency tokens as “investment contracts.”
The company maintains that the SEC has not proven the existence of a “contract” between buyers on its platform and token issuers.
The company criticizes the SEC for what it sees as an unwarranted expansion of its jurisdiction and for relying on ambiguities and contradictions rather than clear legal precedents.
It states that it will vigorously defend its position and denies the SEC’s allegations, including the claim that it has illegally facilitated the buying and selling of crypto asset securities.
Although the SEC seeks various forms of reparation, including financial compensation, it is mentioned that in February they reached an agreement with Kraken for $30 million.
Kraken agreed to stop offering or selling securities through cryptoasset staking services or programs
Jesse Powell, co-founder of Kraken, has been critical of US regulators, accusing them of being masochists and extortionists.
Kraken argues that unclear regulations and regulatory challenges make it difficult for cryptocurrency companies to register and comply with regulations.
The company is actively challenging the SEC’s lawsuit, arguing that it has not committed any violations and that the SEC is using its position to exert unwarranted control over the cryptocurrency industry.
This case not only has implications for the firm, but could also set an important precedent for cryptocurrency regulation in the United States.
