Kraken again asks to dismiss SEC lawsuit, citing incorrect wording

The
war
between
the
Kraken
crypto
exchange
and
the
U.S.
SEC
continues
amid
new
statements
from
the
platform.

As

Bloomberg
writes,
citing
a
new
letter
from

Kraken
filed
earlier
this
week,
the
exchange
accuses
the
regulator
of
incorrectly
formulating
its
arguments
in
the
charges.

Kraken
claims
that
the
SEC
used
the
terms
investment
“concept”
and
“ecosystem”
instead
of
“investment
contract”
and
“enterprise”
several
times
in
its
arguments.
According
to
the
platform,
the
regulator
could
not
identify
any
investment
contracts
that
could
be
sold,
brokered,
or
settled
on
Kraken.

The
SEC
previously
noted,
citing
case
law,
that
words
themselves
do
not
determine
the
type
of
security
since
actions
are
not
limited
to
the
obvious
and
trivial.

Last
November,
the
SEC

sued
Kraken,
alleging
it
operated
without
an
appropriate
license.
The
lawsuit
states
that
Kraken
has
been
operating
illegally
since
2018 as
a
securities
exchange,
broker,
dealer,
and
clearing
agency,
earning
hundreds
of
millions
of
dollars.
In
addition,
Kraken
could
mix
its
clients’
funds
with
its
assets,
potentially
leading
to
losses
on
both
sides.

The
SEC’s
filing
asks
that
Kraken
be
permanently
banned
from
operating
as
an
unregistered
exchange.
In
addition,
the
regulator
announced
the
need
to
pay
a
fine
and
return
part
of
the
funds
obtained
illegally.

In
June
2023,
crypto
exchanges

Binance
and

Coinbase

faced
similar
SEC
lawsuits.
As
with
Kraken,
both
exchanges
were
accused
of
violating
securities
laws.