Lawyers for cryptocurrency exchange Kraken argued in a recent court filing that the Securities and Exchange Commission’s (SEC) arguments are unconvincing as both sides prepare for a hearing in June.
Kraken’s lawyers said in court documents filed Thursday that they “have not identified any investment agreements that have been (or are possible) traded, brokered or settled by Kraken.”
Kraken also argued that the agency failed to meet the elements of the Howey test. It’s a 1946 U.S. Supreme Court case that the SEC often cites to determine whether assets qualify as investment contracts, or securities.
Last November, the SEC be sued Kraken’s parent company, Payward, and Payward Ventures are accused of operating an online trading platform. In past court filings, the SEC said the exchange “posed a risk to its customers.” Kraken dismissed the lawsuit. february.
A hearing to discuss Kraken’s motion to dismiss the SEC’s lawsuit is scheduled for June 12 at 2 PM ET.
written contract
The SEC also said in April that it had refuted Kraken’s argument that investment agreements require written contracts. filing. Kraken’s lawyers, meanwhile, said they did not say a written contract was needed.
“The word ‘written’ does not appear anywhere in Kraken’s filing, nor does Kraken suggest that a written contract is required,” Kraken’s lawyers said in a court filing Thursday.
Kraken’s lawyers also applied the “leading question rule” in its most recent filing. This principle, often cited by cryptocurrency companies, states that agencies must obtain explicit congressional approval to decide on matters of national importance. The SEC argued that it was not “being granted new authority.”
“The SEC’s assertion of new authority means that new technologies extend beyond the scope of traditional securities laws,” the SEC said in a filing in April. “Congress does not need to enact custom laws for each new technology that emerges.”
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