Cryptocurrency exchange Kraken, which was indicted by the U.S. Securities and Exchange Commission (SEC), plans to fight regulators and take its case in court.
Marco Santori, the company’s chief legal officer, told CNBC that the legal battle with the SEC could take months.
“The SEC alleges that Kraken is an exchange clearing house and broker-dealer for investment contracts. “There is nothing like that… There is nothing like that… It’s all empty content created by the agency, so we don’t agree with it.”
Marco Santori, Kraken CLO
According to Santori, the regulator’s actions are bad policy. He noted that other countries are creating “fit-for-purpose” regulatory frameworks for digital asset companies.
This will ensure that cryptocurrency exchanges do not avoid regulation, but rather demand a legal framework that is “appropriate for the cryptocurrency ecosystem.”
According to Santori, Ripple’s victory in court against the SEC last July sets a real precedent. At a summer court hearing, the judge acknowledged that XRP, the ecosystem’s native token, cannot be considered a security. Now, this could play into the hands of cryptocurrency platforms involved in legal proceedings with regulators, the legal director believes.
“(The U.S. cryptocurrency industry) received its first ruling on this issue in the Ripple case. I think it was reasonable. Most have been sensible and I think other courts will see this as well. “In the same way.”
Marco Santori, Kraken CLO
On November 21, the SEC accused Kraken of mixing funds with user assets. Additionally, the SEC alleges that the trading platform was never registered to operate as a securities platform, broker, dealer, or clearing agent.