Kraken, the renowned cryptocurrency exchange, is not backing down in the face of charges filed by the U.S. Securities Exchange Commission (SEC). The company’s Chief Legal Officer (CLO), Marco Santori, recently confirmed in an interview with CNBC that Kraken plans to fight and respond to the complaint in court. This article delves into Kraken’s stance on the SEC allegations and its plans to challenge them.
The SEC accuses Kraken of being an exchange clearing house and broker dealer for investment contracts, but Santori vehemently disagrees. According to him, these claims hold no ground as they are entirely fabricated by the agency. He asserts that there is no such thing as Kraken acting in these capacities and thus believes the SEC’s charges are baseless.
Kraken’s determination to combat the SEC is evident as Santori confirms the company’s intention to fight and respond to the complaint in court. However, he acknowledges that this process may take several months. While Kraken faces this legal battle, Santori emphasizes that the SEC’s actions are misguided and that other countries are creating regulatory frameworks specifically tailored for digital asset companies. He further highlights that members of Congress are also working towards establishing legislation that better suits the crypto ecosystem.
Kraken’s objective is not to evade regulation but to advocate for a legal framework that genuinely makes sense for the crypto industry. Santori asserts that the current lack of suitable regulations in the U.S. contributes to the challenges faced by digital asset companies. By requesting a sensible legal framework, Kraken hopes to pave the way for a more accommodating environment that fosters innovation and growth within the crypto ecosystem.
When discussing Kraken’s next steps in the legal case, Santori refers to Ripple’s court win against the SEC in July. He suggests that this ruling sets a precedent that on-exchange transactions should not be considered securities transactions. Santori is optimistic that other courts will view Kraken’s case in a similar light, drawing upon the reasoning and levelheadedness of the Ripple ruling. While Kraken briefly mentioned the Ripple case in a blog post, further details of how it will address specific complaints alongside the broader securities charges have not been disclosed.
Amongst the SEC’s allegations, one notable claim is that Kraken commingled funds, a practice that Kraken argues is discounted within the complaint itself. The SEC initially filed charges against Kraken on November 20, and the company responded promptly on the same day. While Kraken’s co-founder and board chairman, Jesse Powell, has indirectly commented on the matter, it remains to be seen how the company will address the specific allegations put forth by the SEC.
As Kraken prepares to mount its defense against the SEC charges, its unwavering commitment to advocating for a sensible legal framework showcases the company’s dedication to the crypto ecosystem’s long-term success. Only time will tell how the legal battle unfolds and whether Kraken’s stance will bring about the desired regulatory changes for the industry.
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