Kraken has requested a jury trial in response to the US Securities and Alternate Fee’s (SEC) lawsuit, in response to a Sept. 12 court docket submitting.
The transfer comes after a federal choose rejected Kraken’s bid to dismiss the case, which facilities on claims that the platform operated an unregistered securities alternate.
Kraken’s protection
In its submitting, Kraken denied any criminal activity and criticized the SEC’s strategy to the crypto trade.
The alternate highlighted its makes an attempt to have interaction with the regulator, which was met with resistance. It said:
“Kraken has tried to work with the SEC to make registration possible. However the trade’s efforts have been stonewalled at each step, because the SEC has as an alternative chosen to pursue a method of preventing with its sister regulators for enforcement authority its Chair admitted it didn’t have.”
Additional, Kraken claims it was unaware of which digital property the SEC thought-about “funding contracts” till the lawsuit was filed. The regulator labeled these digital property traded on the crypto platform as securities: ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL.
Kraken additionally disputed the SEC’s time period “crypto asset securities,” arguing that the courts have already rejected it. It said:
“The SEC has pointed to no transactions the place funding contracts had been allegedly fashioned on Kraken. The digital property themselves can’t be the funding contracts as a result of they carry not one of the rights and obligations of a share of inventory, a bond, or some other monetary asset that Congress has mentioned is topic to SEC regulation.”
Consequently, Kraken firmly denied that it engaged in any criminal activity.
Challenges SEC’s authority
Kraken additionally questioned the SEC’s authority to control its enterprise below sure sections of the Securities Alternate Act. The alternate argued that digital property don’t qualify as securities or funding contracts, and due to this fact, buying and selling these property on Kraken doesn’t violate the Alternate Act.
Moreover, Kraken claimed that the SEC failed to offer satisfactory discover that its actions had been illegal, violating the alternate’s due course of rights.
Its authorized staff argued:
“As a result of lack of readability and truthful discover relating to Kraken’s obligations below the regulation, along with the shortage of readability and truthful discover relating to Plaintiff’s interpretation of the regulation, Kraken lacked truthful discover that its conduct was prohibited.”
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