Crypto exchange company Kraken comes under attack from the SEC. In accordance with its policy of relentlessness against crypto companies, the American financial regulator has launched legal proceedings against the platform. Here’s what it is.
Crypto exchange Kraken accused of violating securities law
Kraken has just joined the growing circle of crypto companies having setbacks with the SEC. The latest news is that the US financial regulator has launched legal proceedings against the company.
What the SEC accuses Kraken of is in no way different from the reasons given in the context of the legal actions launched against Binance in June. As with the latter, it is accused of violating the securities law.
This, while confusing the assets of the investors with those of the company. Accusations rejected outright by Jesse Powell, CEO of Kraken. Like Changpeng Zhao, the CEO of Binance, or Brian Armstrong, the boss of Coinbase, also prosecuted by the SEC, the manager announced that he would fight.
Speaking on the case, Jesse Powel did not hesitate to demonstrate a hawkish posture. This, in particular by qualifying the SEC as an institution in “decadence” and its president, Gary Gensler, of “masochistic”.
The Kraken boss said he was preparing for a vigorous defense against the SEC. Referring, moreover, to a previous settlement of 30 million dollars, the manager did not fail to express his frustration in the face of what he considers to be irrational and illogical sanctions. Moreover, illegitimate measures imposed on the entire crypto industry.
A vague feeling of déjà vu…
The SEC’s legal action against a crypto firm like Kraken is not new. It comes in the wake of similar lawsuits filed against other major crypto exchanges such as Binance and Coinbase, mentioned above. These cases highlight the importance that the SEC places on its regulatory policy, which focuses on investor protection. But also respect for the securities laws that it wants to impose on the crypto industry.
However, its policy is subject to numerous criticisms, particularly because it sacrifices without qualms, innovation, the real engine of development of the crypto ecosystem. This is, to say the least, the opinion defended by Jesse Powell in his reaction to this development.
Republican US Senator Cynthia Lummis goes further. It calls into question the absence of clear rules regarding cryptos by raising the need to delimit the regulatory scope of the SEC.
The defeats suffered by the latter against Ripple Labs and Grayscale exposed it to accusations of inconsistency and illogical decision-making. Cynthia Lummis called on Congress to establish specific rules for the financial regulator. This, by requiring it to distinguish between security assets and commodity assets in the crypto space. We imagine that all these legal battles involving crypto exchanges in the United States will likely have broader implications. Particularly for the crypto exchange segment. An impact on the trajectory of the regulatory framework within the sector as a whole cannot be ruled out.
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