Regulation
Are the SEC’s accusations poorly worded? Kraken fights back in crypto regulation shock by Benzinga
Benzinga – Amid Kraken’s ongoing legal skirmish with the U.S. Securities and Exchange Commission (SEC), the cryptocurrency exchange has challenged the SEC’s linguistic accuracy in a new legal brief.
What happened: Kraken’s defense, detailed in a response filed last Thursday, criticizes the SEC for failing to clarify the exact nature of the “investment contracts” involved in activities on its platform, Bloomberg reported.
Instead, the SEC ambiguously referred to “investment concepts” and “ecosystems.”
Kraken’s legal argument highlights the SEC’s apparent lexical missteps in its April response to Kraken’s motion to dismiss the case.
The exchange argues that the SEC’s failure to properly define the affected securities undermines the legitimacy of the regulator’s accusations.
The SEC’s own words, from an earlier filing, were invoked against it: “the words themselves do not delineate the type of security because ‘the scope of the act does not stop at the obvious and commonplace'”, a reference intended to emphasize the broad scope of regulatory reach, while ironically emphasizing the vague terminology used by the agency.
Also read: Donald Trump says ‘You’d better vote’ for him if you’re pro-crypto: but was he always ‘okay with it’?
The ongoing dispute with Kraken is part of a broader SEC initiative targeting major players in the cryptocurrency industry. Similar regulatory scrutiny has been applied to other key entities in the sector, such as Binance Securities (CRYPTO: BNB) and Global Coinbase (NASDAQ:COIN).
Despite the aggressive regulatory stance, Kraken settled with the SEC for separate fees related to its staking services earlier in February 2023.
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And after: As industry players prepare for the Benzinga conference, the results of cases like Kraken’s could influence discussions about how digital asset companies navigate the complex web of U.S. securities laws.
Growing regulatory scrutiny within the crypto industry highlights themes that will be crucial at the upcoming Benzinga Future of Digital Assets event on November 19.
The event is expected to delve deeper into the intersection of regulation and innovation in the digital asset space.
Lessons learned from these legal battles are expected to be key topics of the event, providing attendees with a clearer perspective on the future regulatory landscape for digital assets.
Read next: House challenges SEC on crypto custody rules, Biden promises blockade
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