Kraken has requested a jury trial in response to the US Securities and Trade Fee’s (SEC) lawsuit, in keeping with a Sept. 12 courtroom submitting.
The transfer comes after a federal choose rejected Kraken’s bid to dismiss the case, which facilities on claims that the platform operated an unregistered securities change.
Kraken’s protection
In its submitting, Kraken denied any criminal activity and criticized the SEC’s strategy to the crypto business.
The change highlighted its makes an attempt to interact with the regulator, which was met with resistance. It acknowledged:
“Kraken has tried to work with the SEC to make registration possible. However the business’s efforts have been stonewalled at each step, because the SEC has as a substitute chosen to pursue a method of preventing with its sister regulators for enforcement authority its Chair admitted it didn’t have.”
Additional, Kraken claims it was unaware of which digital belongings the SEC thought-about “funding contracts” till the lawsuit was filed. The regulator labeled these digital belongings traded on the crypto platform as securities: ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL.
Kraken additionally disputed the SEC’s time period “crypto asset securities,” arguing that the courts have already rejected it. It acknowledged:
“The SEC has pointed to no transactions the place funding contracts had been allegedly shaped on Kraken. The digital belongings themselves can’t be the funding contracts as a result of they carry not one of the rights and obligations of a share of inventory, a bond, or some other monetary asset that Congress has stated is topic to SEC regulation.”
Because of this, Kraken firmly denied that it engaged in any criminal activity.
Challenges SEC’s authority
Kraken additionally questioned the SEC’s authority to control its enterprise beneath sure sections of the Securities Trade Act. The change argued that digital belongings don’t qualify as securities or funding contracts, and subsequently, buying and selling these belongings on Kraken doesn’t violate the Trade Act.
Moreover, Kraken claimed that the SEC failed to supply sufficient discover that its actions had been illegal, violating the change’s due course of rights.
Its authorized crew argued:
“Because of the lack of readability and truthful discover concerning Kraken’s obligations beneath the legislation, along with the dearth of readability and truthful discover concerning Plaintiff’s interpretation of the legislation, Kraken lacked truthful discover that its conduct was prohibited.”
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