Kraken SEC lawsuit continues tension with Digital Chamber of Commerce intervention

Key points:

• The Digital Chamber of Commerce intervened in the Kraken SEC lawsuit by filing a brief in support of the exchange.
• CDC opposes the SEC’s attempt to expand securities laws to cover all digital asset transactions.

The Chamber of Digital Commerce (CDC) cascade In the legal battle between the U.S. Securities and Exchange Commission (SEC) and Kraken, a longtime cryptocurrency exchange, we have filed an amicus curiae brief in support of Kraken.

Read more: Kraken review: Best and most secure exchange for professional traders

Kraken SEC Litigation: CDC Responds to SEC’s Expansion of Securities Laws

The move, disclosed in court filings on February 27, highlights the significance of a case that could have serious implications for the regulatory environment of the digital asset industry.

Founded in 2014, CDC is the world’s largest digital asset and blockchain trade association, which aims to counter the SEC’s over-regulation of regulating digital asset trading without legal backing.

Arguing that the SEC’s attempt to expand the application of securities laws to cover all digital asset transactions is legally flawed, the CDC argues that digital assets should not automatically be classified as investment contracts.

Moreover, the CDC warned of broader ramifications, characterizing the SEC’s enforcement stance as a potential impediment to the development and adoption of blockchain technology. The filing highlights previous high-profile cases where the SEC failed to secure fully favorable outcomes, including lawsuits involving Ripple and Terraform Labs.

Kraken’s Defense: SEC Retaliation Claims, Cooperation with Industry Colleagues

The Kraken SEC lawsuit, filed in November 2023, accuses the exchange of operating as an unregistered stock exchange, broker, dealer, and clearinghouse and of mixing customer and corporate funds. Kraken has strongly denied these accusations and recently filed a motion to dismiss the case on February 23rd.

Kraken claimed the SEC’s enforcement action was retaliatory, following Chief Legal Officer Marco Santori’s political speech before Congress in May and the SEC’s lawsuit against Kraken. Kraken’s legal action is consistent with similar strategies adopted by competitors Binance and Coinbase in similar lawsuits against the SEC.

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