The SEC has dropped its case against crypto exchange Kraken, which had been ongoing since November 2023. This dismissal aligns with a broader trend of the SEC withdrawing from high-profile crypto lawsuits.
By Godfrey Benjamin
Edited by Marco T. Lanz
Updated
3 mins read
The United States Securities and Exchange Commission (SEC) has decided to dismiss its lawsuit against the crypto exchange Kraken.
As announced by the trading platform, the case will be dropped with prejudice. This will also prevent the oversight agency from bringing the same claims again. Additionally, Kraken will face no penalties, operational changes, or admission of wrongdoing.
Kraken, which has been involved in this legal tussle since November 2023, expressed its position on the SEC’s decision, calling the ligation baseless.
“The SEC’s lawsuit, which mischaracterized our consistent business model, was always without merit. This dismissal confirms what we’ve said all along: Regulatory actions must be based on facts, not political agendas,” Kraken noted.
For context, the lawsuit alleged that Kraken operated as an unregistered securities exchange, broker, and dealer. The regulator also accused the exchange of mixing customer funds with its own.
This came after Kraken’s February 2023 settlement with the SEC, where it agreed to discontinue its staking service in the US and pay $30 million in fines.
Notably, throughout the court proceedings, the exchange consistently maintained that it did not violate securities laws.
It is important to note that Kraken’s legal victory aligns with a broader trend of the SEC withdrawing from high-profile crypto lawsuits. For example, the US SEC has also dropped its cases against Coinbase Global Inc. and Consensys, as Coinspeaker reported earlier.
Similarly, this move coincides with President Donald Trump’s administration establishing a new SEC crypto task force. The task force will be in charge of developing clearer regulatory guidelines for digital assets.
Under the last administration, the SEC aggressively pursued legal action against major crypto firms such as Binance, Ripple Labs Inc., and Coinbase. In the lawsuits, the regulator argued that the exchanges violated US security regulations. However, with increasing pressure from industry leaders amid President Trump’s pro-crypto stance, the commission appears to be reconsidering its approach.
Instead of relying on lawsuits, the SEC will now focus on developing policies that provide regulatory clarity for the crypto sector. This might bring more stability and opportunities to the crypto community in the country.
While Kraken’s lawsuit’s dismissal is a win, the exchange also believes that transparent and well-defined regulations are urgently needed.
Following the closure of the case, Kraken reiterated its commitment to collaborating with lawmakers and regulators in its new pursuit. Ultimately, it plans to create a legal framework that facilitates innovation while protecting consumers.
“We are pleased that leadership in Congress and Commissioner Peirce’s Crypto Task Force are taking up this difficult, mandatory work to put in place real, forward-thinking legislation and regulation. These steps will ensure that we never return to regulation by enforcement,” Kraken stated.
In related news, Kraken secured an EU MiFID license last month after acquiring a Cyprus investment firm authorized by the Cyprus Securities and Exchange Commission (CySEC). These licenses will help it expand regulated crypto derivatives services.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
