It’s safe to say that most crypto executives are not big fans of the US. And that’s all due to the hostile regulatory environment.
US regulators, such as the SEC, have taken a tough stance against most crypto platforms, such as Binance, and Coinbase. Let’s discover more about this news.
The SEC Classifies Altcoins as Securities in Kraken Lawsuit
In this case, Kraken co-founder, Jesse Powell, recently slammed the SEC for suing his exchange for securities violations. Powell labeled the SEC as “the USA’s top decel”, which suggests that the SEC slows progress.
Today, the SEC filed a complaint alleging that Kraken operates as an unregistered national securities exchange, broker, and clearing house. We disagree with their claims and plan to vigorously defend our position. https://t.co/a0C4wzBo3f
— Kraken Exchange (@krakenfx) November 21, 2023
Furthermore, Powell, in a Twitter post, claimed the SEC was unsatisfied with the $30 million fine it levied on Kraken in February. Powell wrote in his tweet: “The masochists haven’t been happy with the beatings they’ve been taking in NY and are shopping for a different flavor of RegDom in CA. I thought we settled all their concerns for $30m in Feb. Now they’re back for seconds?”
Would it make sense for all the other US based crypto companies to band together and fight this together?
— Geoffrey_docket (@frizzaud) November 21, 2023
Powell added in a subsequent post that the SEC had sent a clear message to Kraken and other cryptocurrency companies. He warned other crypto companies to get out of “the US warzone” to avoid costly legal disputes.
They just got a $4 bil check from Binance. This is quite a lucrative business for them.
Ridiculous in many ways to extort exchanges like this.
— Duo Nine ⚡ YCC (@DU09BTC) November 21, 2023
What are the SEC’s Latest Charges Against Kraken About?
The SEC filed a new lawsuit against Kraken on Monday. The regulator claims Kraken operates as an unlicensed broker, clearing agency, and dealer. The lawsuit also accused the crypto exchange of commingling users and corporate funds.
The SEC’s lawsuit against Kraken resembles those it filed against other crypto platforms. However, the unique point is that the SEC claims Kraken posed a “significant risk” by combining up to $33 billion in client cryptocurrency with its company assets.
Like in earlier lawsuits against crypto firms, the commission named other tokens that it believed to be unregistered securities, such as MATIC, NEAR, and ALGO. The lawsuit claims that Kraken was instrumental in offering these tokens to potential investors.
So, the SEC lawsuit demands a ban on Kraken to stop the platform from functioning as an unregistered exchange. The agency is also seeking a fine and Kraken’s return of illegitimate gains.
BREAKING: U.S. Securities and Exchange Commission classifies altcoins as securities in Kraken lawsuit 🚨
The following tokens are listed:
– Solana (SOL)
– Cardano (ADA)
– Polygon (MATIC)
– Internet Computer (ICP)
– Cosmos (ATOM)
– Algorand (ALGO)
– Sandbox (SAND)
— Bitcoin News (@BitcoinNewsCom) November 21, 2023
Kraken issued a lengthy statement, denying these charges. The exchange wrote: “We disagree with the SEC’s complaint against Kraken, stand firm in our view that we do not list securities, and plan to vigorously defend our position.”
The exchange added that “Congressional action is the most appropriate path to resolving the lack of regulatory clarity in the U.S.” Kraken expressed disappointment in seeing “the SEC continue down its path of regulation by enforcement, which harms American consumers, stunts innovation, and damages U.S. competitiveness globally.”