Kraken Requests Jury Trial in Authorized Battle With the SEC Over Alleged Securities Regulation Violations

The crypto alternate Kraken has formally requested a jury trial in its ongoing authorized battle with the U.S. Securities and Alternate Fee (SEC).

Final November, the SEC charged Kraken with working its crypto buying and selling platform as an unregistered securities alternate, dealer, vendor and clearing company.

Earlier this yr, Kraken filed in US District Courtroom to dismiss these costs, positing that the SEC’s claims would widen the definition of funding contracts and develop the regulator’s jurisdiction exterior of its delegated accountability.

That request didn’t fly with US District Decide William H. Orrick, who denied the alternate’s request final month, ruling that the SEC “plausibly alleged that at least some of the cryptocurrency transactions that Kraken facilitates on its network constitute investment contracts, and therefore securities, and are accordingly subject to securities laws.”

In a brand new doc filed in courtroom on Thursday, Kraken requests a jury trial and responds to the SEC’s grievance, arguing that it operated for greater than a decade with none trace from the regulator that it was violating securities legal guidelines.

“In fact, in 2021, the Chair of the SEC told Congress that ‘the exchanges trading in these crypto assets do not have a regulatory framework at the SEC,’ and ‘it is only Congress that could really address this lack of a framework.’

Kraken has tried to work with the SEC to make registration feasible. But the industry’s efforts have been stonewalled at every step, as the SEC has instead chosen to pursue a strategy of fighting with its sister regulators for enforcement authority its Chair admitted it did not have. This has predictably led to a patchwork of inconsistent and irreconcilable court decisions in an area that is plainly in need of a uniform regulatory approach.”

Kraken says the SEC refused to establish which crypto asset transactions it categorised as funding contracts till the regulator filed its grievance final yr.

“The digital assets themselves cannot be the investment contracts because they carry none of the rights and obligations of a share of stock, a bond, or any other financial asset that Congress has said is subject to SEC regulation. The digital assets themselves are the only things that are traded, brokered, or settled on Kraken.”