[{"category":{"name":"BitScreener Exclusive","exported_url":"bitscreener-exclusive"},"id":"e65c3da1-1c20-4244-844f-4c309ce5ae51","updated_at":"2024-05-13T08:07:42.574884+00:00","account":{"firstName":"Marigold","lastName":"Vance"},"description":"Kraken, a crypto exchange, has filed for the dismissal of claims made by the U.S. Securities and Exchange Commission (SEC) in order to prevent a major reshuffling of the U.S. financial regulatory system, as stated in court documents submitted in the Northern District of California on Thursday. ","sapo":"Kraken has escalated its dispute with the U.S. SEC by responding to the agency's April letter asking the court to dismiss the case, which highlights their lack of evidence when making the allegations.","title":"Kraken Fires Back at SEC. Lack of specificity in court allegations is unveiled!","content":"

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For the uninitiated, the SEC had previously sued Payward and Payward Ventures, or Kraken, in November 2023. SEC accused the organization of operating as an unregistered broker, dealer, exchange, and clearing house, allegedly prioritizing profits over investor protection, following a settlement related to a previous staking service. The agency also accused Kraken of deficient internal controls, which saw $33 billion worth of customer assets commingled with business funds.

In February 2024, Kraken filed its dismissal motion against SEC's, arguing that cryptocurrencies listed in the SEC's complaint should be treated as commodities, not securities. Moreover, in the April’s letter, the company even indicated that the SEC has not identified any specific investment contract on its platform and criticizes the agency's use of incorrect terminologies, using ‘Investment Concepts’ and ‘Ecosystem’ instead of ‘Investment Contracts’ and ‘Enterprise’. Such lack of precision in identifying wrongdoing is highlighted in Kraken's filing, which implies that the evidence for the final allegation in court is insufficient.

Kraken Argument Against SEC

Source: Kraken’s motion

Meanwhile, in the 39-page opposition response to Kraken's motion, SEC asserted that it is within their authority to enforce securities laws, including the requirement for securities intermediaries to register with the SEC.

Kraken's rebuttal to the SEC's motion focuses on whether the SEC's jurisdiction aligns with the Howey test to determine what constitutes a security. Kraken's lawyers argue that the SEC's interpretation of the Howey test expands its jurisdiction beyond what was intended by Congress, which may result in a “significant reordering” of the U.S. financial structure. He wrote: “Such a significant reordering of the U.S.’s financial regulatory structure should be debated in Congress, not in the courts”. The upcoming hearing is scheduled for June 12, before Judge William H. Orrick.

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","tags":[{"tag":{"tag":"Kraken","id_tag":"kraken"}}],"image":{"fileName":"Kraken-vs-SEC.png"}}]

Kraken Fires Back at SEC. Lack of specificity in court allegations is unveiled!

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