Kraken has requested a jury trial in response to the US Securities and Alternate 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 alternate.
Kraken’s protection
In its submitting, Kraken denied any criminal activity and criticized the SEC’s strategy to the crypto trade.
The alternate highlighted its makes an attempt to interact with the regulator, which was met with resistance. It said:
“Kraken has tried to work with the SEC to make registration possible. However the trade’s efforts have been stonewalled at each step, because the SEC has as an alternative chosen to pursue a method of combating 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 of “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 said:
“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 another monetary asset that Congress has stated is topic to SEC regulation.”
In consequence, Kraken firmly denied that it engaged in any criminal activity.
Challenges SEC’s authority
Kraken additionally questioned the SEC’s authority to manage its enterprise beneath sure sections of the Securities Alternate Act. The alternate argued that digital belongings don’t qualify as securities or funding contracts, and due to this fact, buying and selling these belongings on Kraken doesn’t violate the Alternate Act.
Moreover, Kraken claimed that the SEC failed to offer enough discover that its actions had been illegal, violating the alternate’s due course of rights.
Its authorized staff argued:
“Because of the lack of readability and truthful discover relating to Kraken’s obligations beneath the legislation, along with the shortage of readability and truthful discover relating to Plaintiff’s interpretation of the legislation, Kraken lacked truthful discover that its conduct was prohibited.”
