- Kraken is escalating its legal fight with the SEC by requesting a jury trial.
- Kraken argues that digital assets don’t qualify as investment contracts as they lack traditional financial securities
Crypto exchange Kraken is escalating its legal battle with the U.S. Securities and Exchange Commission (SEC) by demanding a jury trial. This request, revealed in a recent court filing, comes as a California judge has ruled that the SEC’s lawsuit against Kraken will proceed to trial.
The SEC first sued Kraken in November 2023, accusing the exchange of operating as an unregistered securities exchange, broker, dealer, and clearing agency. The regulator also listed 11 cryptocurrencies, including ADA, SOL, and MATIC, as unregistered securities.
Additionally, the SEC’s lawsuit seeks to halt Kraken’s alleged violations, demand disgorgement of profits, and impose civil penalties. In response, Kraken has firmly denied the SEC’s allegations. The exchange argues that it has not violated any laws and presents 18 defenses against the SEC’s claims.
Also, Kraken contends that its operations, including listing over 220 crypto assets and providing services like margin trading and over-the-counter trading, do not classify it as a securities exchange under current laws.
Eventhough, the exchange also argues that digital assets do not meet the criteria of investment contracts, they lack the rights and obligations associated with traditional financial securities.
Kraken Challenges SEC Lawsuit as a Crypto Regulation Debate
Additionally, it claims the SEC’s actions infringe on its First Amendment rights, asserting that the regulator’s lawsuit was filed without fair notice or due process.
Moreover, the case against Kraken is part of a broader regulatory crackdown on cryptocurrency exchanges, with similar lawsuits filed against Binance and Coinbase. These legal challenges highlight ongoing tensions between the crypto industry and regulators over how digital assets should be governed.
Also, the firm’s push for a jury trial reflects its determination to contest the SEC’s claims and clarify the regulatory landscape for cryptocurrencies. The outcome of this legal battle could have significant implications for the future of crypto regulation in the U.S.
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