Kraken vows to ‘vigorously defend’ SEC lawsuit amid Congressional support Kraken vows to ‘vigorously defend’ SEC lawsuit amid Congressional support
Kraken's co-founder Jesse Powell described the financial regulator as an "extortionist."
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Updated: Nov. 21, 2023 at 9:35 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto exchange Kraken would “vigorously defend” itself against the lawsuit brought by the U.S. Securities and Exchange Commission (SEC), according to a Nov. 20 statement.
Similarly, CEO David Ripley and co-founder Jesse Powell strongly disputed the regulator’s claim, asserting that the exchange does not list securities.
Kraken products unimpacted
Kraken said the SEC lawsuit did not impact its products and vowed to keep servicing clients without interruption.
The exchange said the regulator’s allegations were “incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.”
“The SEC has promulgated no rule describing how an order in a digital asset should be matched, no guidance on how a trade should be cleared, and articulated no standards for how to broker a digital asset transaction,” Kraken wrote. “The allegation is hollow; there is no such thing as an exchange, broker-dealer, or clearing agency for investment contracts. The SEC is demanding compliance with a regime that doesn’t exist.”
Executives slam SEC
Ripley emphasized the firm’s commitment to defending its stance and explicitly stated that they do not list securities tokens.
Ripley further criticized the SEC for urging exchanges to “come in and register” without providing clear regulatory guidelines. He added:
“[The SEC] allegations are factually incorrect, contrary to law, and the wrong way to create policy in the United States.”
Echoing Ripley’s sentiments, Powell described the SEC as an extortionist and its accusations as an affront to America while questioning the regulator’s motive.
According to him, financially constrained crypto firms should reconsider operating within the U.S. as the SEC knows “that a real fight will likely cost [over] $100 million and valuable time.”
Congress support
Meanwhile, members of the U.S. Congress, including Senator Cynthia Lummis and Warren Davidson, have shown support for the exchange.
Lummis criticized the SEC’s enforcement-driven approach and urged Congress to establish a clear regulatory framework. She emphasized the need for explicit rules distinguishing securities from commodities. She said:
“The SEC cannot continue ruling by enforcement. Crypto asset companies have repeatedly tried to get guidance from the SEC only to be hit with enforcement actions, causing unnecessary harm to consumers.”
On the other hand, Davidson reposted a social media post from pro-crypto lawyer John Deaton urging Kraken customers to have their voices heard.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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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.
David Ripley is the CEO of Kraken, a San Francisco-based digital asset exchange.
Jesse Powell is an expert in virtual currencies, online/international payments and fraud, as well as co-founder and former CEO of Kraken, one of the most trusted and largest Bitcoin exchanges in the world with number one EUR market share.
Cynthia Lummis, known for her pro-crypto views, is a United States Senator from the great State of Wyoming.