Kraken, one of the world’s largest cryptocurrency exchanges, is facing a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) on Monday, November 20.
The SEC accused Kraken of operating as a securities exchange without proper registration with the regulator.
Filed in a San Francisco federal court, this legal action is part of SEC Chair Gary Gensler’s efforts to assert regulatory oversight over the cryptocurrency industry, arguing that digital assets should be treated as investment contracts and subject to federal securities laws.
Kraken has pledged to vigorously defend itself against the lawsuit filed by the SEC, as stated in a November 20 release . CEO David Ripley and co-founder Jesse Powell strongly contested the SEC’s claim, asserting that the exchange does not list securities.
Kraken assured that the SEC lawsuit would not impact its products and committed to serving clients without interruption. The exchange criticized the regulator’s allegations, deeming them “incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.”
Kraken argued that the SEC had not provided rules for matching orders in digital assets, guidance on clearing trades, or standards for brokering digital asset transactions. The exchange emphasized that the SEC is demanding compliance with a nonexistent regulatory framework.
Ripley reiterated the firm’s dedication to defending its position and explicitly stated that they do not list securities tokens. He criticized the SEC for urging exchanges to register without offering clear regulatory guidelines.