Kraken Denies SEC's Allegations, Demands Jury Trial in Crypto Exchange Lawsuit

In a recent development in the legal battle involving cryptocurrency exchange Kraken and the U.S. Securities and Exchange Commission (SEC), the company filed a new document in the lawsuit on September 12, in which it again denied the regulator's allegations and demanded a jury trial to defend itself in the lawsuit.

Kraken filed a new document in the lawsuit on September 12, again denying the regulator's allegations and demanding a jury trial to defend itself in the lawsuit. In the process, the regulator accused the exchange of violating securities regulations by listing cryptocurrencies on its platform, such as Cardano (ADA), Algorand (ALGO) and Solana (SOL), as securities.

The SEC filed a lawsuit against Payward Inc. and Payward Ventures Inc., the companies behind Kraken, in November 2023, alleging that they operate the digital asset platform as an unregistered securities exchange, broker-dealer, dealer, and clearing agency. Additionally, in the lawsuit, the SEC listed the cryptocurrencies SOL, ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, and OMG as unregistered securities.

“Kraken attempted to work with the SEC to make registration feasible,” the company said in the lawsuit. “But the industry’s efforts were blocked at every turn, as the SEC instead chose to pursue a strategy of battling its sister regulators for enforcement authority that its chairman admittedly did not have.”

In its argument, the company highlighted that the cryptocurrency regulator has never made it clear which transactions on the platform constitute investment contracts.

Furthermore, Kraken also stated that it does not recognize specific terms used by the SEC in its complaint, such as “crypto asset securities,” “securities traded on Kraken,” “proprietary assets,” and “investors.” For the exchange, the terms mentioned are ambiguous or undefined.

In August, U.S. District Judge William H. Orrick denied the exchange's motion to dismiss the SEC's lawsuit. Despite this, Kraken's chief legal officer Marco Santori recently stressed his confidence in a victory from the company.