Kraken Takes on SEC in Epic Verbal Spat Over Filing Wording

The ongoing verbal battle between Kraken, a leading crypto trading platform, and the US Securities and Exchange Commission (SEC) took a new twist. The crypto exchange has fired back with a new filing, arguing that the agency’s case is all talk and no substance

SEC filed a motion in April and even cited a law case to back up its points. It stated that “The words alone don’t define the type of security because ‘the scope of the law extends beyond the obvious and ordinary.”

In response, Kraken argued that the agency did not specifically identify any investment contracts traded on its platform. It was pointed out that the SEC used terms like “investment concept” and “ecosystem” instead of “investment contract” and “enterprise.” The crypto platform really emphasized these differences in its filing.

Kraken takes a stand against SEC lawsuit 

This whole legal fiasco started when the crypto exchange was sued by the SEC in November 2023 for running a broker, dealer, exchange, and clearing agency without proper registration.

Kraken clapped back with a filing that argued that if the lawsuit goes forward, it could set a dangerous precedent for the agency’s jurisdiction. On the basis of this argument, TheCoinRise reported recently that the crypto exchange sought the dismissal of the lawsuit. 

To show strong interest in the ongoing case, it was reported in March that eight state attorney generals in the United States filed an amicus brief which served as their legal opinions. They opined that the legal action against the exchange firm is beyond the regulator’s remit.

In spite of the Kraken vs SEC legal saga, the crypto exchange recently launched its self-custody wallet for virtual assets. This multi-chain wallet will act as a doorway to the decentralized financial system, open to both Kraken’s old and new users.

SEC cracks down on Crypto Exchanges 

SEC has charged other crypto exchange platforms similar to the Kraken case for violation of the securities laws over the past year.

Binance Holdings have had one too many troubles at its disposal, besides the ongoing chaos surrounding the arrest of its Compliance Officer, Tigran Gambaryan, in Nigeria, the world’s largest digital asset trading platform is also facing lawsuits from the SEC for not complying with US laws.

TheCoinRise media also reported last year that Coinbase and the SEC were in a debacle over unregistered securities offerings. Back in February 2023, Kraken, the company behind Payward Inc., reached an agreement with the SEC to resolve the charges related to its staking business.