Kraken Fires Back at SEC: Highlights Lack of Specificity in Allegations
The post Kraken Fires Back at SEC: Highlights Lack of Specificity in Allegations appeared first on Coinpedia Fintech News
Kraken has intensified its clash with the US SEC. It fired back a reply to the agency’s April letter, as the company had asked the court to dismiss the case.
Kraken points out that the SEC has not identified any specific investment contract traded, brokered, or settled on its platform. It also underlines the agency’s incorrect use of terminologies, using ‘Investment Concepts’ and ‘Ecosystem’ instead of ‘Investment Contracts’ and ‘Enterprise’.
The exchange signifies the SEC’s lack of precision to the alleged wrongdoing. Kraken’s filing also suggests that the explanation provided is insufficient and does not address the issue of identifying specific investment contracts.
Kraken’s Alleged Wrongdoing
SEC had previously charged the company in November 2023 for operating the Kraken crypto trading platform as an unregistered broker, dealer, exchange, and clearing house. As per the SEC, Kraken’s failure to register had deprived the investors of significant protections as Kraken chose unlawful profits over investor protection in SEC’s words. Notably, the SEC had made similar allegations against Binance and Coinbase, as it is seen cracking down on the wider crypto industry.
SEC Claims Being Within Authority
Previously, the company argued that the cryptocurrencies listed in the SEC’s complaint should be treated like commodities and not securities, as was reported by Coindesk. In response to Kraken’s motion to dismiss the case, the SEC had filed an opposition in April which included that the enforcement action simply is within the authority granted by Congress to the SEC. It also said that in applying the Howey Test, Kraken is required to register and Congress need not enact specialized laws for each new technology that comes in.
Reportedly, the Kraken’s lawyers have asked the court to dismiss the SEC’s claims to avoid significant reordering of the US Financial Regulatory Structure, as per the court filing submitted on Thursday. Judge William H. Orrick is scheduled to hear the matter on June 12.
