Crypto exchange Kraken is pushing for a jury trial in its legal battle against the U.S. Securities and Exchange Commission (SEC).
Kraken Seeks Jury Trial in SEC Case, Defends Against Securities Violations
The exchange is facing allegations from the SEC that it violated federal securities laws by failing to register as a broker, clearinghouse or exchange.
The lawsuit, filed in the Northern District of California in November, is part of a broader regulatory crackdown on the cryptocurrency industry. Similar lawsuits have also been filed against major crypto platforms Binance and Coinbase, which have been accused of violating securities laws.
The SEC's complaint against Kraken lists 11 tokens, including ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL, and alleges that they are unregistered securities.
The SEC is seeking a permanent injunction to bar Kraken from continuing the alleged violations, as well as forgiveness of ill-gotten gains and civil penalties.
In its latest court filing, Kraken denied all allegations of illegal conduct, presenting 18 defense arguments. The exchange’s legal position focuses on its interpretation of the Securities Act and Exchange Act, arguing that these laws do not apply to digital assets.
Kraken insists that it never registered with the SEC because it was not legally required to do so, and that it does not function as a broker, clearing agent or securities exchange under current regulations.
Kraken also accused the SEC of exceeding its regulatory authority and claimed the agency had no legal jurisdiction over the platform.
According to Kraken, the SEC failed to show that the digital assets it listed qualified as “investment contracts,” a classification required for them to fall under securities laws. The exchange argued that the digital assets lacked the characteristics of traditional financial securities like stocks or bonds.
*This is not investment advice.