Attorneys for the state argue that the entire SEC went too far in the Kraken lawsuit.

Eight state attorneys general in the United States have filed a joint amicus brief, arguing that the Securities and Exchange Commission has exceeded its jurisdiction in the lawsuit filed against the cryptocurrency exchange Kraken.

The briefing was presented on February 29 by officials from Arkansas, Iowa, Mississippi, Montana, Nebraska, Ohio, South Dakota and Texas, along with other participants, including industry lobbyists.

According to the filing, state officials said they would not support either side, instead “opposing the SEC's regulation of crypto-assets investment contracts because Congress did not grant this authority to the SEC.”

The attorneys general have argued that the SEC is expanding what it defines as an “investment contract” and is in a position to preempt state laws, including consumer protection laws, that could be violated when the SEC tries to regulate them. crypto assets as securities. are there:

“The court should reject the classification of crypto assets as securities without an investment contract. The SEC's use of this undelegated authority would put state laws at risk for state consumers by better tailoring state laws to specific risks for non-securities.”

“The SEC's enforcement action exceeds its authority,” the brief said. “Some state laws provide more protection for consumers than federal warranty laws,” he added.

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This follows a Feb. 22 filing by Kraken asking that the lawsuit with the SEC be dismissed in its entirety on the administrator's “dangerous precedent” claims.

Kraken argued that the SEC does not have a “no-limit principle” and that if this case were to be ruled in the SEC's favor, it would give the agency too broad powers. Kraken also said it would give the agency too broad powers to defend crypto exchanges.

The same day, Kraken released a blog post denying the SEC's claim that it operates as an unlicensed securities exchange, broker, dealer and clearing agency. “Between customers and exchange.

In November, the SEC filed charges against Kraken, saying it was operating without registration, collecting client funds and failing to prevent conflicts of interest.

The SEC has brought similar complaints against other crypto-related companies such as Coinbase, Binance and the US branch of Bittrex, the first two of which are ongoing cases.

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