Centralized cryptocurrency trading platform Kraken has again refuted the US Securities and Exchange Commission\u2019s (SEC) allegations that the exchange sold digital assets that qualify as unregistered securities.<\/p>\n
In its response<\/a>, the San Francisco-headquartered exchange insisted it had not violated federal securities laws. Specifically, the exchange mentions that the digital assets sold on its platform do not meet the legal definition of securities or investment contracts.<\/p>\n Specifically, the exchange states that digital assets such as Algorand (ALGO), Cosmos (ATOM), Polygon (POL), Filecoin (FIL), Solana (SOL), and Cardano (ADA) \u2013 among others available on the platform \u2013 are not investment contracts. Kraken is now set to pursue a jury trial against the SEC.<\/p>\n The exchange writes in its official filing:<\/p>\n Kraken has tried to work with the SEC to make registration feasible. But the industry\u2019s efforts have been stonewalled at every step, as the SEC has instead chosen to pursue a strategy of fighting with its sister regulators for enforcement authority its Chair admitted it did not have.<\/p>\n For the uninitiated, in November 2023 the SEC filed<\/a> a lawsuit against Kraken, accusing it of operating an unregistered crypto exchange for digital assets. Unsurprisingly, Kraken CEO Jesse Powell criticized<\/a> the SEC\u2019s lawsuit, calling it a \u201crecurring attempt\u201d at regulation.<\/p>\n While the SEC has gained infamy for its perceived continual policing of crypto businesses, Kraken has found support from US Senator Cynthia Lummis, who argued<\/a> that the SEC \u201ccannot continue ruling by enforcement\u201d without clear crypto laws.\u00a0<\/p>\n To bolster its position, in its filing, Kraken has cited the SEC v. W.J. Howey Co. ruling, which led to the inception of the famous Howey Test that helps determine whether a transaction could qualify as a security or investment contract. The crypto exchange has emphasized the SEC\u2019s inability to prove that the cryptocurrencies in question meet the criteria for securities.\u00a0\u00a0<\/p>\n Kraken\u2019s decision to pursue a jury trial against the financial regulator follows a federal judge\u2019s ruling<\/a> that paved the way for the SEC\u2019s lawsuit against the exchange to proceed to trial. It also comes at a time when the SEC has acknowledged<\/a> that using the term \u201ccrypto asset security\u201d isn\u2019t entirely free of ambiguous interpretations.<\/p>\n The US SEC\u2019s alleged overreach into the crypto industry has forced<\/a> several states to come together in defense of digital assets businesses, as these states have strict laws that aim to safeguard their consumers more than federal securities.<\/p>\nUS SEC\u2019s Crackdown On Crypto Entities Continues<\/h2>\n