The Chamber of Digital Commerce recently filed an amicus curiae defending crypto exchange Kraken in the lawsuit initiated by the US SEC. The Chamber’s purpose behind this amicus brief is to put an end to the SEC’s attempted regulation of the digital asset industry through enforcement without legislative authority. In a statement, the CDC emphasized that while Congress is working on solutions, the SEC’s aggressive approach is stifling innovation.
The Chamber argued that the SEC is wrong in stating that securities laws can be expanded to regulate all digital asset transactions. It firmly believes that digital assets are not inherently investment contracts and should not be treated as such. The group also expressed concerns about the broader effects of enforcement, pointing out that the SEC’s stance poses a threat to the adoption and advancement of blockchain technology.
The Chamber of Digital Commerce further stated that the SEC’s actions could significantly impact the trillion-dollar digital asset space and, consequently, the US economy as a whole. The filing referenced other high-profile cases where the SEC did not achieve entirely favorable outcomes, including cases against Ripple and Terraform Labs.
The SEC initially sued Kraken in November 2023, accusing the exchange of operating as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken has vehemently denied these charges and is currently fighting the case in court. In a recent development, Kraken filed a motion to dismiss the case, highlighting that the allegations primarily revolve around a failure to register rather than fraudulent activities.
The Chamber of Digital Commerce voiced its support for Kraken’s motion to dismiss the lawsuit, standing by the exchange in its legal battle against the SEC. It is important to note that this case is distinct from an earlier case involving Kraken’s staking services, which resulted in the exchange settling with the SEC for $30 million and ceasing those services in the US.
Two other major crypto exchanges, Coinbase and Binance, are currently embroiled in similar SEC cases alleging unregistered exchange operations. These cases began in June 2023 and highlight the regulatory challenges faced by the digital asset industry as a whole. As the legal battle between Kraken and the SEC unfolds, the outcome of this case is likely to have far-reaching implications for the regulation of digital assets in the United States.
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