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Kraken, a prominent cryptocurrency exchange, has contested the lawsuit brought against it by the U.S. Securities and Exchange Commission (SEC), asserting that the SEC's claims lack substantial evidence and misinterpretations.
Allegations of Non-compliance
According to Kraken's motion filed on Thursday in the Northern District of California, the SEC's lawsuit lacks allegations of fraud and unjustly stretches the definition of a contractual relationship. Kraken insists that the SEC's accusations are baseless, highlighting that the SEC has not proven any instances of consumer harm or fraudulent activities.
Cryptocurrencies as Commodities
Kraken argues that the cryptocurrencies listed in the SEC's complaint should be classified as commodities rather than securities, emphasizing that they do not meet the criteria for investment contracts. Drawing comparisons to comic books or baseball cards, Kraken asserts that they may be investments but do not qualify as investment contracts.
Challenging the Howey Test
Kraken further challenges the SEC's reliance on the Howey Test, a legal benchmark for identifying securities, arguing that the cryptocurrencies mentioned in the complaint do not meet the criteria outlined by the test.
According to Fortune, the exchange contends that the SEC's attempt to establish a purchaser-issuer relationship to justify its claims is unfounded.
Jurisdictional Dispute
In addition to contesting the allegations, Kraken asserts that the SEC is overstepping its jurisdiction. The exchange argues that the SEC's claims raise concerns under the Major Questions Doctrine, suggesting that the issues at hand exceed the SEC's regulatory authority.
Ongoing Legal Battles
Kraken's motion to dismiss the SEC's lawsuit is part of the ongoing legal battle between the exchange and the regulatory agency.
According to Coin Desk, while Kraken challenges the SEC's accusations regarding the classification of cryptocurrencies and the application of legal standards, it does not directly address the allegations of commingling customer and corporate funds, as outlined in the SEC's complaint.
Overall, Kraken's response underscores its commitment to contesting the SEC's claims and defending its operations within the cryptocurrency market.
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