Home Crypto Exchanges SEC Lawsuit Against Kraken Highlights Crypto Regulations: XRP’s Curious Absence and Kraken’s Defense Strategy

SEC Lawsuit Against Kraken Highlights Crypto Regulations: XRP’s Curious Absence and Kraken’s Defense Strategy

XRP

Amidst the ever-evolving cryptocurrency landscape, the U.S. Securities and Exchange Commission (SEC) has once again grabbed headlines, this time targeting the popular crypto exchange, Kraken. The lawsuit alleges the exchange offered crypto assets deemed as securities without appropriate registration, sparking debates around regulatory clarity and the conspicuous absence of XRP from the SEC’s legal onslaught.

The SEC, in its recent legal action filed at a U.S. District court in Northern California, accused Kraken, operating under the names Payward and Payward Ventures, of catering to U.S. customers as a securities exchange, broker, and clearing agency without complying with registration norms. Notably, the SEC highlighted numerous crypto assets traded on Kraken, asserting them as securities, raising concerns over investor safety owing to the lack of proper registration since 2013.

Surprisingly, amidst this tumult, observers noted a consistent absence of XRP from the SEC’s allegations, reminiscent of its exclusion from previous lawsuits involving Binance and Coinbase. This raised eyebrows, especially considering the SEC’s past assertion that XRP was an unregistered security in its legal battle against Ripple and its executives.

A pivotal turn in the XRP saga occurred when Judge Analisa Torres ruled that XRP itself did not qualify as a security, breathing fresh optimism into the crypto community. Despite Kraken suspending XRP support after the SEC charged Ripple in December 2020, it reinstated the asset following the landmark ruling in July this year.

However, what’s intriguing is the SEC’s latest lawsuit against Kraken, which conspicuously omits XRP from the list of alleged securities—a pattern consistent with previous litigations involving Binance and Coinbase. This trend has solidified the belief within the crypto space that XRP stands as the only crypto asset with clear legal status in the U.S.

In contrast, while the SEC bypasses mentioning Bitcoin (BTC) and Ethereum (ETH) in these lawsuits, Ethereum’s status remains disputed. Chairperson Gary Gensler refrains from categorizing ETH as a security or commodity, leaving the asset’s classification in limbo. Meanwhile, BTC remains unchallenged in a trial regarding its status.

Kraken, determined to defend itself against the SEC’s charges, announced plans echoing similar stances taken by crypto exchanges Coinbase and Binance. In stark contrast, Bittrex settled with the SEC, agreeing to a $24 million payout following charges in April. However, interestingly, Bittrex’s recent announcement about shutting down echoes the fate of LBRY shortly after the SEC’s case.

In a detailed filing lodged in a U.S. District Court in Northern California, the SEC pointed fingers at a plethora of crypto assets, including ADA, MATIC, NEAR, COTI, CHZ, ALGO, ATOM, SOL, FIL, AXS, and more, accusing them of falling under the category of securities. Notably absent from this list is XRP, which has seen its own share of legal contention with the SEC.

The saga surrounding XRP adds an intriguing layer to this unfolding narrative. Despite the SEC previously alleging XRP to be an unregistered security in a lawsuit against Ripple and its executives, a recent court ruling countered this stance, affirming XRP as not being a security. This legal victory for XRP has fostered renewed optimism within the crypto community, standing out as a rare beacon of clarity amid the regulatory fog.

Kraken’s decision to resume support for XRP after the pivotal court ruling contrasts sharply with the SEC’s recent lawsuit. The consistent exclusion of XRP from these legal actions against various crypto platforms has solidified the notion that XRP stands as one of the few crypto assets with clear legal status within the U.S.

This isn’t Kraken’s inaugural encounter with the SEC; earlier this year, the SEC filed a similar lawsuit against Kraken, alleging its staking-as-a-service program constituted an unregistered securities offering. Kraken opted to discontinue the service, coupled with a $30 million fine.

As the crypto industry navigates the intricate web of regulations and legal battles, Kraken’s resolve to confront the SEC’s allegations, coupled with the enigmatic exclusion of XRP, signifies a pivotal moment shaping the evolving narrative of crypto regulations in the United States.

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Evie

Evie is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs.

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