Kraken: SEC’s Enforcement Actions for a “Regime that Doesn’t Exist”

Yesterday the SEC charged yet another crypto exchange of buying and selling unregistered securities. This time it’s Kraken’s second turn in the US securities regulators’ crosshairs.

As well as the offering of unregistered securities, the SEC alleges that Kraken co-mingled customer funds.

Kraken quickly responded with a statement that strongly rejected the SEC’s assertions. In particular, Kraken pointed to the recent Torres ruling in the Ripple case, in which the judge found that Ripple did not violate federal securities law by selling XRP on public exchanges.

Kraken noted that the “court held that the SEC’s unprecedented legal theory was contrary to the “economic reality” of such transactions” and that “the SEC’s case against Kraken will fail, too, and for the same reasons.”

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Kraken ultimately asserts that the SEC is “demanding compliance with a regime that doesn’t exist.”