Kraken has requested a jury trial in response to the US Securities and Exchange Commission’s (SEC) lawsuit, according to a court filing on September 12. This move follows a federal judge’s denial of Kraken’s bid to dismiss the case. The SEC accuses the platform of operating an unregistered securities exchange.
Kraken’s Defense: Rejecting SEC Allegations
Kraken denies all allegations of illegal activity and criticizes the SEC’s approach to cryptocurrency regulation. The company highlighted its efforts to work with the SEC, which met with resistance. Kraken stated:
“Kraken has tried to work with the SEC to make registration feasible. However, the SEC has blocked these efforts and pursued a strategy of battling with its sister regulators for enforcement authority that the SEC Chair admitted it did not have.”
Kraken also claims it did not know which digital assets the SEC considered “investment contracts” until the lawsuit. The SEC labeled assets traded on Kraken, including ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL, as securities.
Disputing the Term “Crypto Asset Securities”
Kraken disputes the SEC’s use of the term “crypto asset securities.” The exchange argues that courts have already rejected this term. Kraken stated:
“The SEC has not shown any transactions where investment contracts formed on Kraken. The digital assets cannot be investment contracts because they lack the rights and obligations of stocks, bonds, or other financial assets regulated by Congress.”
Kraken Questions the SEC’s Authority
Kraken also questions the SEC’s authority under specific sections of the Securities Exchange Act. The exchange argues that digital assets do not qualify as securities or investment contracts, so trading them on Kraken does not violate the Exchange Act.
Additionally, Kraken claims the SEC failed to provide adequate notice that its actions were unlawful, infringing upon Kraken’s due process rights. Kraken’s legal team argued:
“Due to unclear and inadequate notice regarding Kraken’s legal obligations and the SEC’s interpretation of the law, Kraken did not have fair notice that its conduct was prohibited.”
Kraken firmly denies any illegal activity and is committed to challenging the SEC’s claims in court.
The post Kraken challenges SEC’s authority, demands jury trial over crypto asset disputes appeared first on CryptoSlate.
