Home Crypto Exchanges Crypto Community Rallies Against SEC’s Kraken Lawsuit: Industry Leaders and Lawmakers Speak Out

Crypto Community Rallies Against SEC’s Kraken Lawsuit: Industry Leaders and Lawmakers Speak Out

Crypto Community Rallies Against SEC's Kraken Lawsuit: Industry Leaders and Lawmakers Speak Out

In a significant turn of events, the United States Securities and Exchange Commission (SEC) filed a lawsuit against cryptocurrency exchange Kraken on November 20, alleging that the platform has been operating as an unregistered exchange, broker, dealer, and clearing agency. Since the announcement, the crypto community, Kraken executives, and prominent figures in the industry have voiced their opinions on social media, revealing the deep divide over regulatory approaches within the U.S. crypto space.

Kraken’s founder, Jesse Powell, went on the offensive, characterizing the SEC’s move as an “assault on America” and dubbing the regulatory body as the U.S.’s “top decel.” Powell even issued a warning to other companies, urging them to consider departing the country in response to what he perceives as aggressive regulatory actions.

Current Kraken CEO, Dave Ripley, took to X (formerly Twitter) on November 21, asserting that the company “strongly disagrees” with the SEC’s claims and is prepared to “vigorously” defend its position. Ripley emphasized Kraken’s commitment to standing up against the allegations, portraying it as an industry leader defending the crypto industry’s right to exist in the U.S. He also pointed out the pressing need for regulatory clarity, stating that the “lack of regulatory clarity in the U.S.” can only be resolved through Congressional action. Ripley concluded by expressing Kraken’s ongoing support for efforts to bring clarity to the chaotic regulatory environment in the U.S.

Prominent crypto lawyer John Deaton joined the chorus of criticism against the SEC, specifically targeting SEC Chair Gary Gensler, whom he referred to as a “despicable and dishonorable regulator.” Deaton did not mince words, asserting that Gensler does not care about any of the involved parties — employees or investors — and predicted a downfall for the SEC Chair. Deaton also referenced Kraken’s previous settlement with the SEC in February, where the exchange agreed to pay $30 million, raising questions about the SEC’s consistent approach.

As the crypto community debated Kraken’s chances in court against the SEC, crypto criminal defense lawyer Carlo D’Angelo weighed in, suggesting that the odds may not be in the SEC’s favor. D’Angelo pointed out that similar arguments have been attempted and failed in other circuits, emphasizing the importance of consistent precedents for judges.

Community members echoed sentiments of skepticism towards the SEC, with one X user stating, “Just because the SEC says something, [doesn’t] make it true! Get them to explain in detail to the court how to come on and register and operate normally.”

While the SEC faces backlash for its stringent stance on crypto, particularly in the absence of clear legislative guidance, the industry has found allies on the regulatory front. U.S. Senator Cynthia Lummis responded to the lawsuit, criticizing the SEC’s approach and insisting that the regulatory body cannot continue to “rule by enforcement.” Lummis highlighted the repeated attempts by crypto companies to seek guidance from the SEC without progress. U.S. Representative Tom Emmer has also thrown his support behind the crypto industry, proposing to defund the SEC’s aggressive actions against crypto.

As the legal battle between Kraken and the SEC unfolds, the crypto community remains divided, underscoring the ongoing struggle for regulatory clarity and a harmonious coexistence between the industry and regulatory bodies in the United States.

 

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Sakamoto Nashi

Nashi Sakamoto, a dedicated crypto journalist from the Virgin Islands, brings expert analysis and insight into the ever-evolving world of cryptocurrencies and blockchain technology. Appreciate the work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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