Kraken Challenges SEC Lawsuit Seeking Dismissal

Legal Battle Ensues

Kraken, a prominent cryptocurrency exchange, has formally requested that a U.S. court reject the lawsuit put forward by the U.S. Securities and Exchange Commission (SEC). The firm is challenging the SEC's authority to regulate certain cryptocurrencies, suggesting that these should be treated akin to commodities rather than securities.

SEC's Stance on Regulation

The SEC maintains its position, based on the Howey test, that Kraken is obliged to conform to registration requirements. According to the SEC, the Congress-given mandate is clear and does not overreach its authority despite the emergence of new technologies.

The Heart of the Dispute

The core of the dispute lies in the application of the Howey test, which is used to define what constitutes a security. Kraken argues the criteria are not met, thus negating the SEC’s jurisdiction in this case. The decision, which could impact the regulatory framework, is set to be heard in court on June 12.