Key Takeaways:
- Kraken disputes SEC allegations of offering unregistered securities, including Cardano (ADA) and Algorand (ALGO).
- The exchange argues that these digital assets do not meet the criteria for securities under the Howey test.
- Kraken criticizes the SEC for regulatory overreach and lack of legal clarity.
Kraken, a leading cryptocurrency exchange, has rejected allegations from the U.S. Securities and Exchange Commission (SEC) that it violated federal securities laws by offering unregistered securities.
The SEC claims that certain digital assets on Kraken’s platform, such as Cardano (ADA), Algorand (ALGO), and Cosmos (ATOM), qualify as securities.
JUST IN: KRAKEN RESPONDS TO SEC ALLEGATIONS DENYING CLAIMS OF OFFERING UNREGISTERED SECURITIES, MAINTAINS ASSETS ARE NOT SECURITIES UNDER US LAW
— BSCN Headlines (@BSCNheadlines) September 13, 2024
Kraken firmly disputes this, stating that these assets do not meet the legal definition of securities under U.S. law.
Referring to the Howey test, which determines what constitutes an investment contract, Kraken argued that the SEC has failed to prove these digital assets fall under this classification.
The exchange also accused the SEC of regulatory overreach and criticized the lack of clarity in the law, stating it wasn’t given fair notice that its activities might be considered illegal.
Prominent legal figures from other crypto companies, including Ripple and Coinbase, have also criticized the SEC’s stance, labeling its classification of digital assets as securities as contradictory and inconsistent.
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