Misstatements of SEC allegations? Kraken Strikes Back in Cryptocurrency Regulation Dispute – Coinbase Glb (NASDAQ:COIN)

In the ongoing legal battle between Kraken and the U.S. Securities and Exchange Commission (SEC), the cryptocurrency exchange has questioned the SEC’s linguistic precision in a new legal letter.

What happened: Kraken’s defense, detailed in a response filed last Thursday, criticizes the SEC for failing to define the precise nature of “investment arrangements” related to activities on its platform, Bloomberg reported.

Instead, the SEC equivocally referred to “investment concepts” and “ecosystems.”

Kraken’s legal assertion highlights the SEC’s apparent lexical errors in its April response to Kraken’s motion to dismiss the case.

The exchange argues that the SEC’s failure to properly define the securities in question undermines the validity of the regulator’s allegations.

The SEC’s own words from an earlier filing were cited against it: “the words themselves do not designate the type of security because ‘the scope of the statute does not end with things that are obvious and common'”; this reference was intended to emphasize the broad scope of the regulatory reach, but ironically points to the unclear terminology used by the agency.

Also read: Donald Trump says ‘you better vote’ for him if you’re pro-crypto: but is 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 industry players such as Binance Holdings (CRYPTO: BNB) i Global coinbase (NASDAQ:COIN).

Despite its aggressive regulatory stance, Kraken reached a settlement with the SEC for separate fees related to its staking services in early February 2023.

What’s next: As industry stakeholders 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.

Increasing regulatory scrutiny of the cryptocurrency industry highlights topics that will be key at Benzinga’s upcoming Future of Digital Assets event on November 19.

The event aims to thoroughly explore the links between regulation and innovation in the digital assets space.

Insights from these legal battles are expected to be key topics at the event, providing attendees with a clearer perspective on the future regulatory landscape for digital assets.

Read next: House challenges SEC over cryptocurrency custody rules, Biden vows block


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