The US Securities and Exchange Commission (SEC) says that Kraken, a well-known cryptocurrency exchange, broke federal securities rules. Kraken has sent the SEC a strong reaction. According to the SEC, Kraken was selling digital assets that should not be thought of as stocks. Because of this, Kraken has said that these claims are not true and that the assets that the SEC stated are not officially stocks.
What Kraken Is Going to Do to Fight the SEC
In recent court papers, Kraken said that assets like Cardano (ADA), Algorand (ALGO), and Cosmos (ATOM) are not investment contracts. In the SEC v. W.J. Howey Co. case, the Supreme Court said that investment contracts must meet certain criteria. Kraken says the SEC’s claims don’t meet the Howey test for what it means to call an asset a security. The exchange says the SEC has not shown that these digital assets meet the standards of the Howey test.
The company also said it had not broken Sections 5, 15(a), or 17A of the Securities Exchange Act of 1934. The exchange said that the government shouldn’t think of coins like Filecoin (FIL) and Solana (SOL) as stocks or investment contracts.
Some people don’t like how the SEC regulates
Kraken doesn’t like how the SEC controls things and says the organization goes too far and doesn’t have clear rules. The exchange says that the SEC’s attempts to regulate its site are unfair since the things it sells are not stocks. Another thing Kraken brought up was the SEC’s lack of clear rules, which it says makes it harder to follow the law.
This response from Kraken shows how angry people are in the bitcoin business that rules aren’t clear. A lot of big crypto companies, like Ripple and Coinbase, have said the same thing.
