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One of the famous crypto exchanges, Kraken, has been dealing with the legal challenge pushed by the United States Securities and Exchange Commission (SEC). In the latest development, Kraken went on file a reply to the agency’s letter linked to the company’s motion to dismiss the case. However, the letter was sent back in April. Kraken makes a bold move 
As per reports, the <a href="https://news.todayq.com/kraken-fights-back-against-sec-challenges-boundless-authority/" rel="noopener noreferrer nofollow">crypto exchange</a> claims that the SEC has failed to identify any specific investment contracts traded, brokered, or settled on its platform. This claim can prove to be a big blow to the SEC if proven right.
It added that Kraken is criticizing the commission’s use of incorrect terminology while presenting its argument. The exchange accused the watchdog of applying like “investment concept” and “ecosystem”. These terms are being used instead of&nbsp; the legally recognized terms “investment contract” and “enterprise.”
The report highlights that the crypto exchange is asserting the SEC’s lack of ability to point out specific investment contracts. This undermines its case and reflects a lack of specificity in identifying alleged wrongdoing.
Kraken has made this argument despite the SEC’s attempt to justify its use of language by quoting case law. The exchange argue that this explanation falls short of addressing the fundamental issue of identifying specific investment contracts. What’s the matter? 
It is important to note that this comes in after the SEC’s action taken against Kraken in November 2023. It was booked for operating as an unregistered broker, dealer, exchange, and clearing agency. However, the watchdog has made similar allegations against other major crypto companies like Binance and Coinbase.
Meanwhile, Kraken had settled separate charges brought by the SEC against its staking business in February 2023.
As per the commission’s filing, the ongoing legal battle began with the agency’s lawsuit in November 2023. It alleges that that Kraken unlawfully facilitated the buying and selling of crypto asset securities since at least September 2018. It was operating as an unregistered securities exchange, broker, dealer, and clearing agency.&nbsp;
Kraken’s failure to register these functions deprived investors of protections mandated by law. This included SEC inspection, recordkeeping requirements, and safeguards against conflicts of interest.
The SEC had alleged that the crypto exchange had made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws.
That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

Kraken fights back against SEC, highlights use of incorrect terminology

Todayq News

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