CDC Supports Kraken Against US SEC Lawsuit

CDC Supports Kraken Against SEC (Doc; Photo. Blockonomy)

JAKARTA - The Chamber of Digital Commerce (CDC) expressed support for the Kraken crypto exchange sued by the US Securities and Exchange Commission (SEC). The CDC criticized the SEC's aggressive regulatory tactics that could harm the digital asset industry.

The CDC, a trading body representing digital asset companies, has filed an amicus stealee to defend Kraken in a lawsuit filed by the US SEC in November 2023. The lawsuit alleges Kraken violated securities laws by operating as an unregistered exchange of securities, brokers, dealers, and clearing institutions. The SEC also accused Kraken of mixing customer funds with his own company's finances.

Just information, Amicus steals is a Latin term which means 'teman of the court'. Amicus steals is a party that is not a party in a case, but gives his legal opinion to the court to help make decisions. Amicus theft is usually submitted by individuals or organizations who have interests or expertise related to issues in the case.

Kraken, which is one of the largest crypto exchanges in the world, rejected the allegations and chose to face the SEC in court. Kraken claims that digital assets traded on its platform are not securities, but crypto commodities or assets. Kraken also confirmed that the SEC does not have jurisdiction to regulate its activities.

In filing on February 27, the CDC supports Kraken's stance and condemns the SEC's approach to hinder the innovation and growth of the digital asset industry. As reported by Cryptopotato, the CDC argues that the SEC has no legal basis for implementing securities laws on all digital asset transactions, and that digital assets are not "investment contracts" as defined by Howey Law.

The CDC also warns that SEC law enforcement actions could jeopardize the space of trillions of dollars worth of digital assets and have a negative impact on the US economy as a whole. The CDC calls for clear and fair regulations for the digital asset industry, which Congress must set, not by lawkeepers.

Meanwhile, Kraken continues to develop its business by launching a new division, Kraken Institutional, which is aimed at serving institutional clients interested in digital assets. The division combines existing services, such as crypto placement, spot crypto trading and over-the-counter, as well as staking. The division is led by Tim Ogilvie, co-founder of Stacted, a company acquired by Kraken in December 2021.

Kraken Institutional aims to offer reliable, scalable, and easily integrable solutions for institutional investors, such as asset managers, hedge funds, and highly enriched individuals. The division also wants to leverage the momentum of approval of some Bitcoin spot (ETF) trading funds in the US, which has attracted great interest and capital from the market.

Kraken Institutional will compete with other established players, such as Coinbase Institutional and Coinbase Prime, which have launched similar services since 2021. Kraken Institutional will also face challenges from Binance Institutional, which was introduced in mid-2022.