A leading cryptocurrency exchange has been hit with a fraudulent charge, according to a court filing published on Thursday. Krakenhas formally requested a jury trial in a lawsuit filed against it by the U.S. Securities and Exchange Commission (SEC). Kraken is countering allegations that it violated federal securities laws by operating without proper registration as a broker, clearinghouse, or exchange.
Kraken Responds to SEC Allegations in Comprehensive Response
Last month, a California judge threw out the SEC’s lawsuit against Kraken Binance And Coinbase The SEC initially filed suit against Kraken in November, seeking a permanent injunction to prevent further securities violations, a pardon for “ill-gotten gains,” and additional civil penalties. The lawsuit specifically alleges that the SEC altcoin(ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG and SOL) were noted for being unregistered securities.
Following the SEC’s attempt to sue, Kraken has categorically denied any illegal activity. In its latest filing, the exchange responded to each of the SEC’s allegations and filed 18 separate defenses.
Kraken’s legal argument claims that neither law covers cryptocurrencies, Securities Law And Stock Exchange LawThe exchange claims it is not required to register with the SEC because it does not meet the definitions of an exchange, broker-dealer or clearing agent under the Exchange Act. “Cryptocurrencies themselves cannot be investment contracts because they do not convey any of the rights and obligations of a stock, bond or other financial asset that Congress has said is subject to SEC regulation,” Kraken said in a court filing.
Cryptocurrency exchangeWhile acknowledging that it offers services such as listing more than 220 cryptocurrencies globally, allowing margin trading, operating an over-the-counter trading desk, providing instant buy features and developing client applications, it denied that these activities classify its platform as a securities exchange, clearinghouse or broker-dealer.
The stock market also SECIt accused the SEC of acting without due process and fair notice and argued that the regulator was punishing it for exercising its first amendment rights. Kraken argued that the SEC lacks the authority to regulate its activities, noting that the agency “has not presented a claim for which relief can be granted.”
The Case Is Extremely Important for the Cryptocurrency Market
The result of the case, cryptocurrency market is being watched closely, especially because it could have significant implications for how cryptocurrencies are classified and regulated under current securities laws. Other cryptocurrency exchanges, especially the SEC’s Binance And CoinbaseHe is following the case closely because he has filed similar lawsuits against .
The SEC’s aggressive approach to major cryptocurrency exchanges signals a broader effort to bring the cryptocurrency market under traditional regulatory frameworks, but Kraken’s struggle reflects an ongoing debate over whether existing securities laws are appropriate for regulating cryptocurrencies and related services.
As the legal battle continues, the industry crypto moneyA potential announcement is pending about the regulatory environment governing cryptocurrencies. A jury trial could set a precedent for how cryptocurrencies are treated under U.S. law and potentially reshape compliance requirements for exchanges and other crypto-related businesses.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
