Kraken Pushes Back Against SEC While Attorney Deaton Secures Amicus Support

SEC Slaps Kraken with Several Charges

Yesterday the United States Securities and Exchange Commission (SEC), in yet another example of regulation by enforcement, charged crypto exchange Kraken over allegedly operating without being properly registered. The allegations include “providing services typical of an exchange, broker, dealer, and clearing agency, without the necessary registrations.”

Additionally, the SEC claims that several crypto assets such as Solana (SOL), Cardano (ADA), Polygon (MATIC) and others are “crypto asset securities,” making their sale to U.S. customers without proper disclosure illegal.

Interestingly XRP was excluded from the SEC claims, presumably over the recent losses the SEC has suffered in front of the courts. Also absent was DOGE, which had commentators wonder if the SEC is afraid of the original meme coin.

NEWS: The SEC has sued Kraken again, after the exchange already paid the regulator a $30M settlement earlier this year

The suit accuses Kraken of selling several so-called “crypto asset securities” but does not mention Dogecoin

Does the SEC fear the Doge? pic.twitter.com/UGEXLwxA40

— 💸💸💸 (@itsALLrisky) November 21, 2023

Kraken Says It Will Fight Back Against SEC

Unlike earlier this year when Kraken was also charged by the SEC over a different matter and paid a fine, this time it’s different. Kraken has vowed to join the ranks of Ripple and Coinbase to fight back against the regulator, whose actions have been called “arbitrary and capricious” by the courts.

In a statement issued yesterday, Kraken said it disagrees with the SEC about operating as an unregistered exchange and plans “to vigorously defend our position.”

Kraken said it will continue to offer its products and services and has worked relentlessly to ensure customers can safely access crypto. It also questioned the continued stance of the agency which is not getting tired of saying ‘come in and register with us,’ when in reality there is no clear path or guidelines.  

Meanwhile, the pressure on the regulator is mounting, as Senator Cynthia Lummis vehemently opposed the SEC approach, calling for Congress to provide clear guidelines and definitions around securities and commodities.

The SEC cannot continue ruling by enforcement. My statement on the Kraken lawsuit below: pic.twitter.com/J3qhzU624N

— Senator Cynthia Lummis (@SenLummis) November 21, 2023

Deaton Assembles Amicus

Popular attorney John Deaton who had filed an amicus on behalf of over 76,000 XRP holders, has opened up channels for concerned Kraken users to join and rally against the SEC.

If you’re a ⁦@krakenfx⁩ user/customer and want to potentially join as amicus curiae, in the case filed by the ⁦@SECGov⁩, below is a Google form to join. Simply put, if you don’t want the SEC claiming to speak on your behalf, consider joining. https://t.co/KgCfoE1Bay

— John E Deaton (@JohnEDeaton1) November 21, 2023

An amicus, or ‘friend of the court’ is a group of people or an organisation who is not an official part of a legal case but can support a judge by offering expertise, industry insight and any information they deem important. It is up to the judge to allow an amicus.

Deaton said this is not about helping the company Kraken but just like in the Ripple case it is about telling the SEC that it does not speak on behalf of investors – at least those who have signed up as amicus.