Kraken SEC Lawsuit Continues Tension With Chamber Of Digital Commerce’s Intervention

Key Points:

• The Chamber of Digital Commerce has intervened in the Kraken SEC lawsuit by filing an amicus curiae brief in support of the exchange.
• CDC argues against SEC’s attempt to broaden securities laws to cover all digital asset transactions.

The Chamber of Digital Commerce (CDC) has stepped into the legal showdown between the U.S. Securities and Exchange Commission (SEC) and Kraken, the long-standing crypto exchange, by filing an amicus curiae brief in support of Kraken.

Read more: Kraken Review: The Best And Most Secure Exchange For Pro Traders

Kraken SEC Lawsuit: CDC Counters SEC’s Broadened Securities Laws

The move, disclosed in court filings on February 27, underscores the significance of the case, which could profoundly impact the digital asset industry’s regulatory landscape.

Established in 2014, the CDC, described as the world’s largest digital asset and blockchain trade association, aims to counter the SEC‘s purported overreach in regulating digital asset transactions without legislative backing.

Asserting that the SEC’s attempt to broaden the application of securities laws to encompass all digital asset transactions is legally flawed, the CDC contends that digital assets should not be automatically categorized as investment contracts.

Moreover, the CDC warns of the broader ramifications of the SEC’s enforcement stance, labeling it as a potential hindrance to the advancement and adoption of blockchain technology. The filing highlights previous high-profile cases where the SEC didn’t secure entirely favorable outcomes, including litigations involving Ripple and Terraform Labs.

Kraken’s Defense: Alleges SEC Retaliation, Aligns with Industry Peers

The Kraken SEC lawsuit, filed in November 2023, accuses the exchange of operating as an unregistered securities exchange, broker, dealer, and clearing agency, alongside allegations of commingling customer and corporate funds. Kraken has vehemently denied these accusations, recently filing a motion to dismiss the case on February 23.

Kraken’s response contends that the SEC’s enforcement action is retaliatory, citing political speech by its chief legal officer Marco Santori before Congress in May, followed swiftly by the Kraken SEC lawsuit. Kraken’s legal maneuverings align with similar strategies employed by competitors Binance and Coinbase in analogous lawsuits against the SEC.