Beneath the turbulent waters of the crypto world, a fierce battle rages on between the mighty Kraken exchange and the formidable U.S. Securities and Exchange Commission (SEC).
In a fiery response to the SEC’s charges, Kraken has called out the regulator for its sloppy argumentation. According to a new letter filed by the exchange, the SEC has repeatedly used vague terms like “concept” and “ecosystem” instead of the legally precise terms of “investment contract” and “enterprise.”
Kraken boldly asserts that the SEC has failed to provide any concrete evidence of such contracts being sold, brokered, or settled on their platform.
The SEC has long recognized that the mere use of certain words does not automatically classify something as a security. After all, actions can speak louder than words, and their significance can go far beyond the obvious and mundane.
Kraken, the popular cryptocurrency exchange, has been hit with a lawsuit from the SEC for operating without a proper license. According to the lawsuit, Kraken has been running illegally as a securities exchange, broker, dealer, and clearing agency since 2018, raking in massive profits of hundreds of millions of dollars.
But that’s not all – the allegations also reveal that Kraken may have been commingling their clients’ funds with their own, putting both parties at risk for potential losses.
Exclusive: Bitcoin hits the milestone of one billion transactions
Bitcoin Skyrockets to $64K: Bull Trap or Run? Expert Unveils Market Secrets
Poloniex Hacker Loots $308,000 in Ethereum via Tornado Cash
The SEC has unleashed its wrath upon the popular crypto exchange, Kraken, with a demand for a permanent ban on its operations as an unregistered exchange. But that’s not all – the regulator is also seeking retribution in the form of a hefty fine and the return of ill-gotten gains.
This is not the first time the SEC has come down hard on the crypto world, as just last month, industry giants Binance and Coinbase were also targeted with similar lawsuits. It seems like no one is safe from the SEC’s watchful eye when it comes to violating securities laws.