On Election Day, the U.S. Securities and Exchange Commission (SEC) filed a motion in the Northern District Court of California, seeking to strike down core defenses put forth by the cryptocurrency exchange Kraken in their ongoing legal battle. Kraken’s legal team, led by attorney Michael O’Connor, condemned the SEC’s timing, describing it as an “Election Day gambit” aimed at sidestepping transparency on the SEC's regulatory inconsistencies.
The SEC’s motion argues that Kraken received adequate warning when the agency charged the exchange last year for allegedly violating securities laws by marketing certain crypto assets as “investment contracts.” This filing aims to invalidate Kraken’s defenses, including the major questions doctrine and due process arguments, which Kraken claims are essential to protect its operations from what it views as regulatory overreach.
The SEC coming after Kraken now.
— RYAN SΞAN ADAMS - rsa.eth 🦄 (@RyanSAdams) November 20, 2023
The crime?
Being a crypto exchange.
This is the 2nd time this year - Kraken was already extorted for $30m in penalties by the SEC earlier this year.
They are trying to kill crypto in the U.S.
Absolute sham of a regulator. pic.twitter.com/w49hzx0MuQ
The SEC asserts that Kraken’s claims of regulatory ambiguity lack merit, insisting that the exchange was sufficiently cautioned about the possible classification of its crypto offerings as securities. According to the SEC, Kraken’s defenses could unnecessarily prolong the case, divert resources, and lead to repeated litigation of the same issues.
Kraken’s recent legal moves include a demand for a jury trial and a formal challenge to the SEC’s categorization of several cryptocurrencies—such as Solana (SOL), Cardano (ADA), and Polygon (MATIC)—as securities. Kraken alleges that its attempts to comply by registering with the SEC were consistently “stonewalled,” with SEC Chair Gary Gensler purportedly enforcing securities laws in a manner that negatively impacts the crypto sector.
The filing also arrives amidst growing speculation that Gensler may step down now that Donald Trump won the election, as historical precedent shows SEC chairs often resign when a new administration takes office.
I just personally donated $1m (mostly #ETH) to @realDonaldTrump.
— Jesse Powell (@jespow) June 28, 2024
For too long, the crypto industry has been under attack by Elizabeth Warren, Gary Gensler and others. Despite overwhelming bipartisan Congressional efforts to put clear rules in place, the Biden White House has… pic.twitter.com/Ksxf3P2oCb
Kataryna Habeliia
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