Cryptocurrency exchange Kraken, facing charges from the U.S. Securities and Exchange Commission (SEC), will fight the regulator and respond to the complaint in court.
As the company’s chief legal officer (CLO) Marco Santori told CNBC, the legal battle with the SEC could take several months.
“The SEC alleges that… Kraken is an exchange clearing house and broker-dealer for investment contracts. None of those things exist… there’s no such thing… it’s entirely and hollow made up by the agency, and so we disagree.”
Marco Santori, Kraken CLO
According to Santori, the regulator’s actions are bad policy. He noted that other countries are creating regulatory frameworks that are “fit for purpose” for digital asset companies.
In doing so, the cryptocurrency exchange will not avoid regulation, but rather is asking for a legal framework “that makes sense for the crypto ecosystem.”
According to Santori, Ripple’s victory in court with the SEC in July set a real precedent. During the summer court hearing, the judge admitted that the native token of the ecosystem – XRP – cannot be considered a security. Now this can play into the hands of crypto platforms that are embroiled in proceedings with the regulator, the legal director believes.
“[The U.S. crypto industry] just got [its] very first ruling on these issues in the Ripple case … I think it was it was well reasoned, I think most of it was levelheaded, and we think other courts are going to see it the same way.”
Marco Santori, Kraken CLO
On Nov. 21, the SEC accused Kraken of mixing its funds with user assets. In addition, the SEC also alleges that the trading platform was never registered to operate as a securities platform, broker, dealer, and clearing agency.
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