30s Summary

The SEC has requested a Californian court to dismiss parts of Kraken’s defense against accusations of unlawful activities. Kraken’s assertions about unclear securities laws concerning crypto-assets and lack of warning about their law violations have been dismissed by the SEC. The SEC also seeks to throw out Kraken’s “major questions doctrine” defense. Moreover, the SEC aims to curtail Kraken’s multiple information requests that are believed to be linked to unsupported legal defenses.

Full Article

The SEC has asked a Californian court to dismiss some of Kraken’s defenses on the crypto exchange’s case. The exchange got into hot water in late 2023 when they were called out for unlawful activities. The SEC isn’t buying Kraken’s claims about the fuzziness of securities laws related to crypto assets. They also dismissed Kraken’s claims that they didn’t have fair warning that their actions were against the law.

Moreover, the agency wants to toss out Kraken’s “major questions doctrine” defense. Essentially, this is a legal principle that says agencies can’t expand their powers unless Congress specifically tells them to.

For some context, the SEC sued Kraken in November 2023, alleging they ran their platform as an unofficial securities exchange and broker and that they made lots of money doing it – possibly millions of dollars. Kraken tried to get the case tossed out, but they were turned down in August.

The SEC wasn’t pleased with Kraken’s multiple information requests, which it thought were linked to these legally unsupportable defenses. It’s hoping to nip these legal defenses in the bud to keep the scope of the discovery phase in check, save resources, prevent Kraken from rehashing the same issues throughout the case, and to keep the summary judgment narrow.