Kraken Requests Jury Trial in Legal Battle With the SEC Over Alleged Securities Law Violations

Crypto change Kraken has formally requested a jury trial in its ongoing authorized battle with the US Securities and Alternate Fee (SEC).

Final November, the SEC accused Kraken of working its crypto buying and selling platform as an unregistered securities change, dealer, supplier and clearing company.

Earlier this yr, Kraken filed a movement within the US District Courtroom to dismiss these fees, arguing that the SEC’s claims would broaden the definition of funding contracts and broaden the regulator’s jurisdiction past its delegated duty.

That request didn’t make it to U.S. District Decide William H. Orrick, who denied the change’s request final month, ruling that the SEC “plausibly alleged that no less than a number of the cryptocurrency transactions Kraken facilitates on its community represent funding contracts, and subsequently, securities, and are accordingly topic to the securities legal guidelines.”

In a brand new doc filed in court docket Thursday, Kraken requests a jury trial and responds to the SEC’s grievance, arguing that it operated for greater than a decade with none indication from the regulator that it violated securities legal guidelines .

“In 2021, the SEC chairman informed Congress that ‘the exchanges that commerce these crypto property haven’t any regulatory framework on the SEC,’ and that ‘solely Congress might really handle this lack of a framework. ‘

Kraken has tried to work with the SEC to permit registration. However the business’s efforts have been stymied at each step, because the SEC has as a substitute chosen to pursue a technique of competing with its sister regulators for enforcement powers that its chairman admitted didn’t exist. This has predictably led to a patchwork of inconsistent and incompatible judicial choices in an space that clearly wants a unified regulatory method.”

Kraken says the SEC declined to establish which crypto asset transactions it categorised as funding contracts till the regulator filed its grievance final yr.

“The digital property themselves can’t be the funding contracts as a result of they don’t carry any 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. The digital property themselves are the one issues which are traded, brokered or settled on Kraken.