Kraken Seeks Jury Trial in Legal Battle With SEC Over Alleged Securities Violations

Kraken has requested a jury trial in its dispute with the SEC, challenging allegations that it operated as an unregistered securities exchange. The exchange argues it has complied with regulations for over a decade, accusing the SEC of expanding its jurisdiction without a clear framework.

Crypto exchange Kraken has escalated its legal battle with the U.S. Securities and Exchange Commission (SEC), formally requesting a jury trial to resolve the ongoing dispute. Last November, the SEC accused Kraken of running its crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken contests these allegations, arguing that the SEC is overstepping its bounds.

Earlier this year, Kraken sought to have the charges dismissed, claiming that the SEC’s interpretation would broaden the definition of investment contracts and unjustly expand its authority. However, U.S. District Judge William H. Orrick denied this request, ruling that the SEC had “plausibly alleged” that some of the cryptocurrency transactions Kraken facilitates may indeed qualify as investment contracts, and thus fall under securities laws.

In a new filing, Kraken has responded by requesting a jury trial. The exchange contends that it has operated for over a decade without any prior indication from the SEC that it was violating securities laws. Kraken pointed to remarks made by SEC Chair Gary Gensler in 2021, stating that crypto exchanges lacked a regulatory framework from the SEC and that only Congress could resolve the issue.

“Kraken has attempted to cooperate with the SEC to create a feasible registration process, but the industry’s efforts have been met with resistance at every step,” the company argued in its filing. Kraken asserts that the SEC has refused to specify which crypto asset transactions it considers to be securities, leaving the industry in regulatory limbo.

The SEC claims that Kraken listed more than 11 different “crypto asset securities” on its platform, including popular assets such as Cardano (ADA), Solana (SOL), and Algorand (ALGO), and argues that Kraken should have registered accordingly.

As the case progresses, Kraken continues to challenge the SEC’s jurisdiction and the legal definitions of digital assets, while the SEC maintains its stance on the regulatory classification of certain cryptocurrencies.

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