Crypto exchange Kraken recently made a bold move by filing a motion to dismiss the lawsuit brought against it by the U.S. Securities and Exchange Commission.
Welcome to a closer look at the intersection of cryptocurrency and government in State of Crypto – your go-to CoinDesk newsletter.
Setting the Stage
Breaking away from conventional legal jargon, Kraken’s defense strategy against the SEC lawsuit is turning heads. The exchange vehemently refuted any claims of actual fraud or harm to its consumers in its motion to dismiss.
Significance of the Battle
The legal tussle between Kraken and the SEC is just one piece of a larger puzzle that the industry is closely monitoring. With similar lawsuits targeting industry giants like Coinbase and Binance.US, the central question remains – how should the SEC regulate the crypto space, and are its current initiatives on point?
Analyzing the Defense
Delving into Kraken’s legal defense sheds light on both familiar and unique arguments. While echoing sentiments shared by Coinbase and Binance.US in their motions to dismiss, Kraken also carved out its unique stance. The exchange pointed out the SEC’s allegations of active marketing without delving deep into the specifics and highlighted the lack of direct consumer harm alleged by the SEC.
Interestingly, the legal strategies employed by Kraken and its peers set the stage for a perhaps protracted legal battle that might eventually involve the highest echelons of the U.S. judiciary.
As the Coinbase case unfolds in the Southern District of New York, Binance.US faces its legal battles in the District of Washington, and Kraken defends itself in the Northern District of California. Meanwhile, a new player, Legit.Exchange, has thrown its hat in the ring by challenging the SEC in the Northern District of Texas.
With multiple districts and potential appeals in the mix, the legal wrangling is expected to continue for the foreseeable future, potentially leading to the involvement of higher courts.
Legal Waters Running Deep
To legal aficionados following this saga, the road ahead appears winding and uncertain. The timeline for resolution is murky, and the potential scenarios that could unfold before the Supreme Court of the United States (SCOTUS) intervenes are varied and complex.
Events from earlier in the week:
- Amidst legal proceedings, Alex Mashinsky consented to his legal team also representing Sam Bankman-Fried.
Upcoming:
- A hearing in the case involving Sam Bankman-Fried is scheduled to affirm legal representation.
Additionally, the Financial Stability Oversight Council convened in a closed session, marking an important milestone in regulatory deliberations. Meanwhile, a resolute judge finalized a significant plea deal between Binance and U.S. prosecutors.
Further afield:
- In a curious legal twist, an AI-infused chatbot at Air Canada created a refund policy that the airline now has to adhere to, signaling a new era in customer service.
- The proliferation of in-flight Wi-Fi has given rise to unique passenger experiences, including a recent incident on United Airlines Flight 354 that led to a safe diversion to Denver.
- In another legal saga, a lawsuit alleges Deltec Bank provided substantial credit to Alameda Research, fueling the growth of Tether (USDT).
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Until next time!
