Crypto Exchange Kraken Says SEC Plans to Dismiss Lawsuit

Cryptocurrency exchange Kraken said in a Monday (March 3) blog post that staff from the Securities and Exchange Commission (SEC) agreed to dismiss the commission’s lawsuit against Kraken.

The SEC agreed to dismiss the lawsuit with prejudice, with Kraken making no admission of wrongdoing, paying no penalties and making no changes to its business, according to the blog post.

Reached by PYMNTS, an SEC spokesperson declined to comment on the blog post.

In its complaint filed in November 2023, the SEC charged Kraken with running an unregistered securities exchange, broker, dealer and clearing agency and alleged that the company deprived investors of “significant protections.”

In its Monday blog post, Kraken attributed the change to new leadership at the White House and the SEC and said the lawsuit was always without merit, was politically motivated and “clouded instead of clarified” rules for an industry that sought transparency.

“Instead of engaging in that hard but necessary work, prior leadership at the SEC and throughout the government took a regulation-by-enforcement approach that stifled progress and disadvantaged the U.S. against other countries who fostered innovation through fair and transparent digital asset regulatory regimes,” the post said.

Kraken added in the post that it will work with policymakers and regulators to establish guidelines that protect consumers while fostering technological progress.

“We are pleased that leadership in Congress and Commissioner [Hester M. Peirce’s] Crypto Task Force are taking up this difficult, mandatory work to put in place real, forward-thinking legislation and regulation,” the post said.

The SEC announced the launch of its Crypto Task Force on Jan. 21, saying it is focused on developing a “comprehensive and clear” regulatory framework for crypto assets.

Peirce told PYMNTS in March 2022 that crypto companies have been arguing for years that they need more guidance from the SEC to understand whether their products are securities and need to be regulated as such.

Kraken’s blog post came four days after the SEC said it dismissed its pending civil enforcement action against cryptocurrency exchange Coinbase.

“For the last several years, the commission’s views on crypto have been largely expressed through enforcement actions without engaging the general public,” SEC Acting Chairman Mark T. Uyeda said Thursday (Feb. 27). “It’s time for the commission to rectify its approach and develop crypto policy in a more transparent manner. The Crypto Task Force is designed to do just that.”

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