Crypto News – In the litigation against the crypto exchange Kraken, eight US state attorneys general contended in a joint amicus brief that the SEC had exceeded its authority as assigned.
New Development in Kraken and SEC Case: Allegedly Overstepped the Authority’s Boundaries
States stated in the filing that they do not support either party but rather object to the SEC regulating cryptocurrency assets in the absence of an investment contract since Congress has not given the SEC this authority.
The attorneys have the authority to stop the SEC from potentially violating state laws, such as consumer protection laws, by attempting to regulate cryptocurrency assets as securities. The attorneys general contended that the SEC was broadening the definition of an “investment contract.”
The court should reject categorizing crypto assets as securities absent an investment contract. The SEC’s exercise of this undelegated authority puts state consumers at risk by preempting state statutes better tailored to the specific risks of non-securities products.
The attorneys
Kraken Shares a Blog Post on the Case
This comes after Kraken filed a move on February 22 asking the SEC to completely dismiss the litigation on the grounds of the regulator’s “dangerous precedent” and overreach. According to Kraken, granting the SEC’s request in this litigation would grant the agency an excessive amount of power because it has “no limiting principle.”
The day after, the cryptocurrency exchange published a blog post disputing the SEC’s assertion that Kraken is an unlicensed broker, dealer, clearing agency, and securities exchange. The post also claimed that Kraken refers to cryptocurrency tokens as investment contracts without providing evidence of any real contracts that exists between the exchange and its users.
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