Nikolas Sargeant
In its dismissal motion, Kraken challenges SEC's claims, alleging a lack of fraud evidence. The focus is on Kraken's purported unregistered status, with no fraud or consumer harm allegations. The primary argument revolves around cryptocurrency classification, asserting they should be treated as commodities, drawing parallels to established assets like Bitcoin and Ether. The goal is to establish a clear distinction in the cryptocurrency space.
Furthermore, Kraken challenges the SEC's adherence to the Howey Test, a Supreme Court precedent used as a benchmark for identifying securities. The exchange argues that the SEC did not meet the requirements set out by the test, which evaluates whether an investment contract exists based on an expectation of profits from the efforts of others.
In a bold move, Kraken also questions the SEC's jurisdiction, claiming that the regulatory body is overstepping its authority. The exchange argues that there is a Major Questions Doctrine issue, suggesting that the SEC's involvement in this case raises significant questions about its jurisdictional boundaries.
It's worth noting that Kraken's motion does not directly address the SEC's allegations of commingling customer and corporate funds. In the SEC's complaint, this conduct is cited as an example of behavior that would not be permitted for registered entities.
In a blog post, Kraken highlights confidence, and stresses regulatory clarity. Legal battle's outcome may impact cryptocurrency classification and regulation in the U.S., closely monitored by the community and regulators.
