Chamber of Digital Commerce Supports Kraken in SEC Case

Kraken contests SEC allegations in court, with the Chamber of Digital Commerce supporting its motion to dismiss the case.

According to court documents dated February 27, the Chamber of Digital Commerce has appointed an amicus curiae to defend the cryptocurrency exchange Kraken in the lawsuit instigated by the US SEC.

As explained by the Chamber, the amicus brief seeks to halt the SEC’s attempt to regulate the digital asset industry through enforcement without legislative authority.

As stated in a CDC statement regarding X:

“Enforcement is NOT enough. While Congress works on solutions, [the SEC’s] aggressive approach stifles innovation. Fair regulations can open opportunities for economic growth, job creation, and financial inclusion.”

According to the trade organization, the SEC’s claim that securities laws can be expanded to regulate all digital asset transactions is false. It deemed this “legally erroneous” and maintained that digital assets “do not inherently constitute investment contracts.”

Additionally, the organization cautioned against the broader ramifications of enforcement. The SEC’s position was “a menace to advancing and adopting blockchain technology.”

Chamber of Digital Commerce’s Legal Defense

This, according to the Chamber of Digital Commerce, could have a substantial effect on the trillion-dollar digital asset market and, by extension, the U.S. economy.

The filing extensively references other prominent cases in which the SEC did not achieve an utterly favorable resolution, such as the ones involving Ripple and Terraform Labs.

Kraken was initially sued by the SEC in November 2023 on charges that it functioned as a clearing agency, underwriter, and dealer in the unregistered securities market. In addition to other allegations, the regulator claimed that the exchange had mixed customer and corporate funds.

Kraken and its representatives contest the SEC’s allegations in court after publicly denying them. Kraken most recently, on February 23, filed a motion to dismiss the case, emphasizing that the allegations pertain primarily to non-registration rather than fraudulent activity.

In its most recent filing, the Chamber of Digital Commerce supported Kraken’s motion to dismiss the lawsuit.

This case is distinct from one that previously involved Kraken’s pledging services. In February 2023, following a $30 million settlement with the SEC, Kraken ceased providing those services in the United States.

Coinbase and Binance, two additional cryptocurrency exchanges, are involved in comparable SEC proceedings that assert unregistered exchange activities. These cases commenced in June of 2023.