- SEC designates 16 crypto tokens, including ADA, AXS, and SOL, as securities in a lawsuit against Kraken.
- Kraken, Coinbase, and Binance have all faced legal scrutiny over the classification of crypto assets as securities.
In a recent legal development, the U.S. Securities and Exchange Commission (SEC) has identified 16 cryptocurrency tokens as securities in a lawsuit against the crypto exchange Kraken. This move is part of an ongoing debate on the regulatory status of various cryptocurrencies and has implications for the entire industry.
The SEC’s complaint against Kraken, filed on Monday, asserts that the exchange offers trading in crypto assets that have previously been subjects of SEC enforcement actions due to their classification as crypto asset securities. These tokens include ADA, AXS, ALGO, ATOM, CHZ, COTI, DASH, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, SAND, and SOL.
The regulator noted that some of these tokens have been mentioned in previous legal cases, involving major exchanges like Coinbase, Binance, and Bittrex. SEC Chairman Gary Gensler has consistently expressed his view that almost all crypto tokens, excluding Bitcoin, should be considered securities. However, a recent court ruling found that XRP does not necessarily fall under this category.
Kraken CEO Dave Ripley responded to the SEC’s charges on social media, strongly disagreeing with the claims and reiterating their stance that they do not list securities. Coinbase, which faced a similar lawsuit in June, has also maintained that its platforms do not list crypto securities. The SEC’s interpretation of “investment contract” has been contested, with Coinbase’s chief legal officer, Paul Grewal, asserting that it violates the law.
Call for Regulatory Clarity
In light of the SEC’s actions, U.S. Senator Cynthia Lummis (R-WY) has called upon Congress to establish a regulatory framework that provides clear rules for the SEC to distinguish between securities and commodities in the crypto space. She emphasized the need for the SEC to move away from ruling solely through enforcement actions, which has caused confusion and harm to consumers in the crypto industry.
This development highlights the ongoing challenges in regulating the cryptocurrency market and the importance of establishing clear guidelines for the classification of digital assets. The outcome of the Kraken lawsuit could have far-reaching implications for the entire crypto ecosystem.
