KRAKEN, one of the world’s largest cryptocurrency exchanges, said on Monday (Mar 3) that the US Securities and Exchange Commission (SEC) agreed in principle to dismiss a civil lawsuit accusing it of operating illegally as an unregistered securities exchange.
In a statement on its blog, Kraken called the dismissal a turning point for cryptocurrency that ended a “wasteful, politically motivated campaign” begun during the Biden administration, and which stifled innovation and investment.
Kraken said the dismissal includes no admission of wrongdoing, no penalties, and no changes to its business. It also said the dismissal is with prejudice, meaning the SEC cannot bring the case again.
“This case was never about protecting investors,” Kraken said. “It undermined a nascent industry that repeatedly urged clear rules of the road.”
“We appreciate the new leadership both at the White House and the Commission that led to this change,” Kraken added.
The SEC declined to comment.
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Kraken had been sued in November 2023, as part of former SEC chair Gary Gensler’s push to bring cryptocurrency under the regulator’s purview.
But the SEC has pulled back on crypto oversight since US President Donald Trump began his second White House term in January.
Last week, the SEC ended a similar lawsuit against Coinbase, the largest US cryptocurrency exchange, and said it may resolve its civil fraud case against Justin Sun, the Chinese entrepreneur and adviser to a Trump-backed crypto project.
Trump, meanwhile, nominated Paul Atkins, a Washington lawyer seen as supportive of digital assets, to succeed Gensler as SEC chair.
The SEC had accused Payward and Payward Ventures, which operate as Kraken, of having since 2018 made hundreds of millions of US dollars arranging purchases and sales of 11 crypto assets while turning a “blind eye” to securities laws.
Kraken was also accused of having deficient internal controls and record keeping.
Like the vast majority of the cryptocurrency industry, Kraken argued that crypto assets, unlike stocks and bonds, did not qualify as investment contracts subject to SEC oversight.
A federal judge in San Francisco denied Kraken’s bid to dismiss the case last August.
Kraken is the world’s 10th-ranked cryptocurrency spot exchange based on traffic, liquidity, trading volumes, and confidence in the legitimacy of reported trading volumes, according to CoinMarketCap. REUTERS