Kraken has been facing a legal battle with the US Securities and Exchange Commission (SEC), and their lawyer, Michael O’Connor, is not holding back in criticizing the SEC’s legal strategy. O’Connor believes that the SEC is trying to dismiss important defenses raised by Kraken in an effort to avoid revealing their flawed and inconsistent policies. He argues that these policies can have a negative impact on the American economy.
Drawing parallels to a similar misstep in the Ripple case, O’Connor is confident that Kraken’s defenses will hold up under scrutiny. He questions the timing of the SEC’s motion, noting that it coincided with a significant political event in the US.
O’Connor also takes a jab at SEC Chair Gary Gensler, suggesting that he is aware of his limited time in office and is doubling down on failed policies. The SEC’s motion to dismiss Kraken’s defenses aims to streamline the discovery process and prevent the exchange from rehashing the same issues repeatedly. The SEC asserts that Kraken had sufficient warning about the potential classification of its crypto offerings as securities and that federal securities laws apply to digital assets.
The SEC filed the lawsuit against Kraken in November 2023, alleging that the exchange has been operating as an unregistered securities exchange, broker, dealer, and clearing agency since September 2018. Despite Kraken’s efforts to have the case dismissed, the court ruled against them in August.
It is clear that the legal battle between Kraken and the SEC is far from over. The outcome of this case could have significant implications for the cryptocurrency industry as a whole. As regulators continue to grapple with the classification of digital assets, exchanges like Kraken are at the forefront of these legal challenges. Only time will tell how this legal showdown will unfold and what it could mean for the future of crypto regulation in the US and beyond.