Kraken filed a motion Thursday to dissolve the Securities and Exchange Commission. November Litigation It accused the cryptocurrency exchange of operating without registration, failing to prevent known conflicts of interest, and commingling customer funds, among other charges.
In addition to submitting documents work outkraken said blog post On Thursday, the SEC said the SEC’s argument was flawed because it claimed the cryptocurrency exchange was operating an unlicensed platform for “investment contracts” without identifying the “agreements” between Kraken users and token issuers.
“None of the assets sued by the SEC are investment contracts under the law,” the exchange said. “For 80 years, the U.S. Supreme Court and the Ninth Circuit (where this case was brought) have always required the SEC to identify the contracts when determining the existence of an investment contract.”
Kraken also argued that cryptocurrency tokens do not qualify for the Howey test, which U.S. authorities often use to define securities sales as “investment contracts.”
“The SEC’s theory is that there can be investment contracts with no contracts, no post-sale obligations, no interaction between the issuer and the purchaser. No joint ventures, no joint ventures, no profits in the business,” the blog post said.
The company added that the SEC’s lawsuit did not accuse Kraken of fraud or providing services to customers and questioned the basis of its legal claims. Kraken said allowing the SEC to continue with this argument would set a “dangerous precedent for institutional overreach.”
Politically driven?
In the X thread, Kraken CEO Dave Ripley said: assert Noting that the SEC’s accusations were politically motivated, the agency said it would sue Kraken shortly after the exchange testified before the House Financial Services Committee and the House Agriculture Committee last May about the SEC’s “excessive approach to cryptocurrencies.” I pointed out how it was revealed.
“America’s cryptocurrency innovators need not fear retaliation for political speech,” Ripley wrote in her X post. “U.S. cryptocurrency exchanges should not operate under an onslaught of regulatory enforcement actions, and jurisdictions around the world continue to advance constructive regulatory rulemaking.”
The SEC’s November lawsuit against Kraken came less than a year after Kraken filed the lawsuit. $30 million fine In return for cryptocurrency staking business.
Kraken and the SEC did not immediately respond to The Block’s request for further comment.
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