Chamber of Digital Commerce files amicus brief supporting Kraken in SEC lawsuit News ▸ US ▸ Kraken ▸ Regulation
Chamber of Digital Commerce files amicus brief supporting Kraken in SEC lawsuit
The Chamber of Digital Commerce said the purpose of the amicus brief is to end the SEC's attempted regulation of the digital asset industry.
2 min read
Updated: Feb. 28, 2024 at 12:15 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The Chamber of Digital Commerce filed an amicus curiae defending crypto exchange Kraken in the lawsuit initiated by the US SEC, according to Feb. 27 court filings.
The Chamber explained that the purpose of the amicus brief is to end the SEC’s attempted regulation of the digital asset industry through enforcement without legislative authority.
The CDC wrote in a statement on X:
“Enforcement is NOT enough. While Congress works on solutions, [the SEC’s] aggressive approach stifles innovation. Fair regulations can open opportunities for economic growth, job creation, and financial inclusion.”
The trade body asserted that the SEC is incorrect in stating that securities laws can be expanded to regulate all digital asset transactions. It called this “wrong as a matter of law” and insisted that digital assets are “not inherently investment contracts.”
The group also warned of the broader effects of enforcement. It called the SEC’s stance “a threat to the adoption and advancement of blockchain technology.” The Chamber also argued that this could significantly impact the trillion-dollar digital asset space and, by extension, the US economy.
The filing notably cites other high-profile cases in which the SEC did not win an entirely favorable outcome, including those against Ripple and Terraform Labs.
SEC sued Kraken last November
The SEC initially sued Kraken in November 2023 over allegations of operating an unregistered securities exchange, broker, dealer, and clearing agency. The regulator also alleged that the exchange had commingled customer and corporate funds, among other actions.
Kraken and its representatives have publicly denied the SEC’s charges and are fighting the case in court. Most recently, Kraken filed a motion to dismiss the case on Feb. 23, emphasizing that the allegations mainly describe failure to register rather than fraud.
The Chamber of Digital Commerce said in its latest filing that it supports Kraken’s motion to dismiss the lawsuit.
The case is separate from an earlier case concerning Kraken’s staking services. Kraken settled with the SEC for $30 million and halted those services in the US in February 2023.
Two other crypto exchanges — Coinbase and Binance — are engaged in similar SEC cases that allege unregistered exchange operations. Those cases began in June 2023.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.
