Kraken challenges SEC in court, seeks jury trial

Cryptocurrency exchange Kraken has made a major move in its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) by demanding a jury trial in response to the regulator’s lawsuit filed last November.

The request for a jury trial was revealed in a court filing on Thursday. This move by Kraken comes after a California judge ruled last month that the SEC’s lawsuit against the exchange would move to trial.

Kraken denies SEC’s accusations

In its filing, Kraken outright denies the SEC’s accusations that it has engaged in illegal conduct. The exchange has presented 18 separate defenses. In addition, Kraken challenged the fundamental basis of the SEC’s case against it.

The exchange’s legal debate is mainly focused on its view of the Securities Act and the Exchange Act. Kraken argues that neither of these acts explicitly includes crypto.

Adding to its argument, Kraken stated that henceforth, it was never required to register with the SEC as an exchange, broker-dealer, or clearing agent.

“The digital assets themselves cannot be the investment contracts because they carry none of the rights and obligations of a share of stock, a bond, or any other financial asset that Congress has said is subject to SEC regulation,” Kraken mentioned in its filing.

Kraken admits to over 220 crypto listings worldwide

The exchange admits to listing over 220 crypto assets globally. Kraken also stated that they offered services such as margin trading and an over-the-counter trading desk.

However, Kraken argued that offering these services doesn’t make it a securities exchange, clearing agency, or broker-dealer.

Kraken also accused the SEC of filing a lawsuit without fair notice. The exchange also highlighted that the regulator’s actions against the exchange infringe upon its First Amendment rights.

The regulator had earlier claimed that Kraken had made over $43 million via its crypto operations since 2020. This is when the SEC stated that the exchange had failed to register with them.

This case is part of a broader crackdown by the SEC on cryptocurrency exchanges. The SEC had filed similar lawsuits against industry giants Binance and Coinbase.