Crypto Community Reacts To Kraken Lawsuit

Crypto Community Reacts To Kraken Lawsuit

The US Securities and Exchange Commission (SEC) filed a lawsuit against Kraken, the crypto exchange, and it has drawn considerable reaction from the crypto community.

Filed on November 20th, the SEC has accused the crypto exchange of operating as an unregistered broker, exchange, clearing agency, and dealer.

It has also claimed that Kraken mixes customers’ assets with its own.

Since the announcement of the news, Kraken executives, well-known lawyers, and the crypto community on social media have shared their views regarding the actions of the SEC.

Kraken’s response

Jesse Powell, the founder of the crypto exchange, called the lawsuit an ‘assault on America’. He even referred to the securities regulator as the country’s ‘top decel’.

In fact, Powell even issued a warning to other crypto firms to leave the US. Dave Ripley, the current CEO of Kraken, also took to X on November 21st.

He said that the company was not in agreement with the SEC and also added that they were planning on vigorously defending their position.

The chief executive asserted that they would fight these allegations and defend the right of the crypto industry to exist in the US.

Ripley also added that only Congressional action would resolve the issue of lack of regulatory clarity in the country.

He went on to say that they would continue with their efforts of bringing certainty and clarity in the face of the chaotic environment.

Lawyers’ views

John Deaton, a prominent crypto lawyer, also talked about the development and called Gary Gensler, the chairman of the SEC, a dishonorable and despicable regulator.

In fact, the lawyer also commented on the settlement deal that Kraken had made with the SEC in February, which involved a payment of $30 million.

Deaton stated that the SEC boss is not concerned about any of the involved parties, whether investors or employees and that he looked forward to the chairman going down.

Carlo D’Angelo, a crypto criminal defense attorney, was asked about the chances of Kraken against the SEC for round two in court.

He said that the odds were not in favor of the SEC. He stated that similar arguments had been made in other circuits and were a failure.

He added that the judge presiding over the Kraken case would consider those decisions because they prefer consistent precedents, as it reduces the possibility of the decision being reversed on appeal.

Other views

An X user stated that the SEC claiming something does not make it true. They said that the regulator should explain in court how companies can register and operate.

There has been a lot of backlash directed towards the SEC due to its crackdown on crypto, especially because the legal system does not offer any clear legislation applicable to exchanges.

Moreover, there are also allies in the crypto space who are on the regulatory side. Cynthia Lummis, the US Senator, responded to the lawsuit.

She said that the SEC cannot continue regulating the crypto space via enforcement. She added that companies had tried to seek guidance from the regulator, but no progress has been made.