Kraken Pushes for Jury Trial in SEC Case, Rails on ‘Crypto Asset Securities’ Claims

Kraken has publicly responded to the SEC's lawsuit, denying the allegations as an unregistered securities exchange.

In a new court filing, Kraken requested a jury trial and challenged the SEC's classification of 11 crypto assets as “crypto asset securities.”

The 11 assets are Solana (SOL), Cardano (ADA), Algorand (ALGO), Cosmos Hub (ATOM), Filecoin (FIL), Flow (FLOW), Internet Computer (ICP), Decentraland (MANA), Polygon (MATIC). include , Nearest Protocol (NEAR) and OMG Network (OMG).

The chief legal officer of the exchange, Marco Santori, emphasized that the court had previously rejected the SEC's attempt to classify these tokens as securities, which do not meet the legal requirements. He cited a ruling by a Northern California judge last month that allowed the lawsuit to proceed, but cast doubt on whether the aforementioned properties were collateral.

“Fundamentally, the court in the Kraken case made the same distinction as in the Ripple case: a token is not a security, but the agreements around the token can be,” Santori said on Twitter at the time.

Kraken has also argued that its platform has been operating since 2013 without any prior warning from the SEC and that its activities are illegal. The lack of clear regulatory guidance, the exchange's lawyers wrote, contributed to this legal conflict.

In the company's new filing, SEC Chairman Gary Gensler admitted in 2021 that there is no regulatory framework in the SEC contract.

Kraken also pointed out that the SEC lacked transparency during the investigation.

Kraken went on to say that efforts to comply with the SEC's refusal to register or cooperate have been “stonewalled” by inconsistent rulings and guidance.

All of this comes after a federal judge in California ruled last month that the SEC's lawsuit against Kraken could move forward.

This case is not the first time Kraken has been involved with the SEC, having previously faced litigation over crypto staking services. That lawsuit ended with Kraken agreeing to pay a $30 million fine and stop offering its stock service to US customers.

https://decrypt.co/247803/ripple-ceo-predicts-sec-chair-gary-genslers-exit-whoever-wins-the-election

Meanwhile, on the same day Kraken filed its response, the SEC posted a warning about “crypto asset securities” scams.

Edited by Stacy Elliott.