The U.S. Securities and Exchange Commission (SEC) is intensifying its legal battle against cryptocurrency exchange Kraken. On November 5, the SEC filed a motion to dismiss several of Kraken’s key defenses.
SEC argues that the exchange’s references to the “major questions doctrine” and claims of inadequate regulatory clarity fail to meet legal standards.
The commission asserts that Kraken’s defenses, including claims of insufficient notice of securities law requirements, are unfounded. It further argues that the term “investment contract” within U.S. securities laws is not vague, as Kraken claims, and provides clear legal guidance. Kraken’s attempt to dismiss the SEC’s lawsuit was previously denied by a federal court in August.
See Related: Kraken Expands Into Australia With A Licensed Crypto Derivatives Product
SEC Vs Kraken And Other Crypto Companies
This legal conflict, which has been going on since November 2023, centers on the SEC’s allegation that Kraken has operated as a securities exchange without proper registration since 2018. The commission cautions that if Kraken’s defenses are allowed, the discovery process may be unduly prolonged and burdensome.
The case comes amid industry speculation that the SEC might revise its crypto regulation stance after Donald Trump’s recent election win, with Kraken co-founder Jesse Powell notably donating $1 million to Trump’s campaign.
With the SEC pursuing similar actions against other crypto exchanges like Coinbase and Binance, many in the industry view the agency as a “misguided federal entity” overstepping its legal authority.
