Kraken again asks to dismiss SEC lawsuit, citing incorrect wording

The battle between the Kraken crypto exchange and the US SEC continues with new statements from the platform.

The exchange accuses the regulator of misformulating its claims in the accusations, Bloomberg wrote, citing a new letter Kraken filed earlier this week.

Kraken claims that the SEC used the terms investment “concept” and “ecosystem” rather than “investment contract” and “business” several times in its arguments. According to the platform, the regulator was unable to identify any investment contracts that could be sold, brokered or settled on Kraken.

The SEC has previously stated, citing case law, that words do not determine the type of security because actions are not limited to the obvious and trivial.

Last November, the SEC filed a lawsuit against Kraken for allegedly operating without a proper license. The lawsuit states that Kraken has operated illegally as a securities exchange, broker, dealer and clearing house since 2018, making hundreds of millions of dollars. Additionally, Kraken may mix customers’ funds with their assets, potentially causing losses to both parties.

The SEC’s filing seeks to permanently ban Kraken from operating as an unregistered exchange. Additionally, the regulator announced that a fine must be paid and part of the illegally obtained funds must be returned.

In June 2023, crypto exchanges Binance and Coinbase faced similar SEC lawsuits. As with Kraken, both exchanges were accused of violating securities laws.