The U.S. Securities and Exchange Commission (SEC) has taken action to dismiss the defenses raised by Kraken in their ongoing legal battle, filing a motion with the Northern District Court of California. According to the SEC, Kraken had sufficient warning regarding potential securities law violations tied to certain crypto assets identified as “investment contracts.”
Kraken Pushes Back Against SEC’s Motion
The SEC’s motion, filed on Election Day, has raised questions from Kraken’s legal team, who criticized the timing, describing it as a strategic move to avoid transparency in the discovery process. Kraken’s attorney, Michael O’Connor, labeled the motion as an “Election Day gambit,” referencing a similar SEC action in the Ripple case, where a comparable motion was ultimately dismissed.
The SEC is seeking to eliminate Kraken’s defenses, which include challenges based on the major questions doctrine and allegations of due process violations. The regulatory body argues that dismissing these defenses would streamline the legal process, avoiding redundant arguments. Meanwhile, Kraken is pushing for a jury trial, contesting the SEC’s stance that 11 digital assets—such as Solana (SOL), Cardano (ADA), and Polygon (MATIC)—qualify as securities. Kraken also alleges that its repeated attempts to register with the SEC were obstructed, pointing to SEC Chair Gary Gensler’s inconsistent regulatory practices.
The SEC’s approach has heightened speculation over Gensler’s tenure, especially as some analysts predict a resignation following Donald Trump’s anticipated election win, as it aligns with historical SEC leadership changes during political transitions.
Kraken Introduces Crypto Derivatives Suite for Australian Market
In a parallel move, Kraken has launched a crypto derivatives suite for wholesale clients in Australia, developed to comply with regulatory requirements after facing a recent legal challenge in the region. This suite enables institutional clients to gain exposure to cryptocurrency price movements through futures derivatives without holding the actual assets.
Kraken’s expansion into the Australian market underscores the exchange’s commitment to providing regulated services for institutional investors despite facing regulatory hurdles. Following a recent Federal Court ruling against its fiat margin trading product, Kraken raised concerns over the lack of regulatory clarity in Australia, stating that businesses and investors in the country continue to operate in a “confusing and uncertain regulatory environment.”
Australia’s crypto market has seen a significant rise in adoption, with an ownership rate of 17%, surpassing the global average of 15%.
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