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Kraken Asserts Innocence in Wake of SEC Legal Action

Cryptocurrency exchange Kraken has stated that its operations remain unaffected following a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), which it describes as “incorrect” and “disastrous.” The lawsuit, directed at Kraken’s parent companies Payward and Payward Ventures, accuses them of functioning as an unregistered online trading platform.

Kraken asserts in a blog post that this legal action does not influence its services and reaffirms its dedication to both U.S. and international customers and partners. This lawsuit is part of a broader pattern of actions by the SEC against other crypto exchanges like Coinbase and Binance, which are accused of operating unregulated securities exchanges. In a separate development, the U.S. Department of Justice is reportedly pursuing over $4 billion from Binance in a potential settlement to conclude an ongoing investigation, as reported by Bloomberg.

Kraken emphasizes that the SEC’s complaint does not include allegations of fraud. The firm clarifies that there are no accusations of market manipulation, customer losses due to hacking or compromised security, breaches of fiduciary duty, ponzi schemes, inadequate reserves, or mismanagement of client funds. It strongly counters the SEC’s claim that its products are investment contracts, labeling this assertion legally incorrect, factually false, and policy-wise disastrous.

Coinbase’s Chief Policy Officer, Faryar Shirzad, commenting on the situation, stressed the importance of applying actual laws in governance, a principle he regards as foundational to America’s legal system and essential for government legitimacy.

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