Kraken demands jury trial in the case against US Securities and Exchange Commission
Crypto exchange Kraken has demanded a jury trial in response to the SEC’s lawsuit alleging it violated federal securities laws by failing to register as a broker, clearinghouse, or exchange.
The ongoing legal confrontation between Kraken, a prominent crypto exchange, and the US Securities and Exchange Commission (SEC) intensifies as Kraken demands a jury trial to address allegations of violating federal securities laws.
According to a court filing on Thursday, Kraken faces accusations similar to those levelled against other major crypto exchanges, Binance and Coinbase, by the SEC. The US federal regulator contends that these companies failed to register as brokers, clearinghouses, or exchanges, as mandated by law.
In November last year, the SEC initiated legal action against Kraken in the Northern District of California, asking the court to permanently enjoin the exchange from committing further securities violations. The agency also seeks to disgorge Kraken’s ‘ill-gotten gains’ and other civil penalties. The SEC has specifically listed 11 tokens claiming these as unregistered securities, arguing that Kraken’s failure to register these securities directly violates federal law.
Kraken asserts it was not required to register with the SEC as it does not classify itself as an exchange, broker-dealer, or clearing agent within the meaning of the Exchange Act. The exchange argues that digital assets should not be considered investment contracts as they lack the rights and obligations associated with traditional financial instruments like stocks or bonds. Additionally, Kraken accuses the SEC of acting without due process and fair notice, suggesting the regulator’s enforcement actions are punitive rather than corrective.
By demanding a jury trial, Kraken is poised to challenge the SEC’s regulatory authority, potentially setting a legal precedent that could influence future digital asset regulation in the United States and beyond.
