Kraken Challenges SECs Case Accuracy in Ongoing Dispute
Kraken and the US Securities and Exchange Commission (SEC) remain embroiled in a dispute, as the crypto exchange filed a new document questioning the accuracy of the regulators case.
The development comes three months after Kraken filed a motion to dismiss the SECs lawsuit against it.
SECs Case Isnt Worded Correctly
Kraken recently filed a response to the SECs April letter regarding the companys motion to dismiss the case. In it, the exchange alleged that the securities regulator failed to identify any investment contracts that were traded, brokered, or settled on its platform.
The filing claims that the SEC used terms like investment concept and ecosystem instead of investment contract and enterprise in its argument.
The SEC had previously stated that the words themselves do not delimit the security type because the reach of the act does not stop with the obvious and commonplace,' citing case law.
Kraken was accused of operating as an unregistered securities exchange, broker, dealer, and clearing agency by the SEC.
According to the regulator, Kraken unlawfully facilitated the trading of crypto asset securities since at least September 2018, generating hundreds of millions of dollars. The charges were similar to the ones leveled against Binance and Coinbase.
Kraken: SEC Overstepping Regulatory Authority
Following the accusations, the firm and its representatives denied the SECs claims, opting to contest the lawsuit in court.
In February, Kraken argued that the Commission was overstepping its regulatory authority in its motion seeking to dismiss the lawsuit. It also contested that cryptocurrencies, particularly those mentioned in the SECs complaint, should be treated as commodities rather than securities.
Later that same month, the Chamber of Digital Commerce (CDC) filed an amicus curiae to back Krakens motion, which said,
The SEC does not allege fraud. The SEC does not allege consumer harm. The SECs sole claims are that Kraken has somehow operated in plain sight for almost a decade as an unregistered securities exchange, broker-dealer, and clearing agency, in violation of the Exchange Act.
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