I feel like this won't end up going well for the SEC. This whole methodology of telling exchanges "I don't know, you figure it out" when they ask for clarity and then turning around and suing them for not figuring it out is extremely shaky legal ground.
Kraken's response: <a href="https://blog.kraken.com/news/kraken-continues-to-fight-for-its-mission-and-crypto-innovation-in-the-united-states" rel="nofollow noreferrer">https://blog.kraken.com/news/kraken-continues-to-fight-for-i...</a><p>> The complaint against Kraken alleges no fraud, no market manipulation, no customer losses due to hacking or compromised security, and no breaches of fiduciary duty. It includes big dollar amounts but does not allege a single one of those dollars is missing or misused – no ponzi scheme, no failure to maintain adequate reserves, and no failure to preserve the identity of client funds 1:1. Indeed, none of these things would be true.<p>> Instead, the complaint makes a technical argument: that Kraken’s business requires special securities licenses to operate because the digital assets we support are really “investment contracts.” This is incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.<p>...<p>> The SEC already tried this theory and a court rejected it outright. The SEC argued in that case that digital assets bought and sold on trading platforms were really securities transactions. The Federal Court for the Southern District of New York disagreed, ruling that the SEC failed entirely to satisfy the relevant legal test. The court held that the SEC’s unprecedented legal theory was contrary to the “economic reality” of such transactions. The SEC’s case against Kraken will fail, too, and for the same reasons.<p>> The SEC alleges that Kraken “commingled” its own funds with its clients’. This is a similar allegation already made of other crypto trading platforms. The SEC cannot and does not allege that any customer funds are missing, or any loss has occurred. Nor does it allege that any loss will occur. The complaint itself concedes that this so-called “commingling” is no more than Kraken spending fees it has already earned.<p>> The SEC famously argues that digital asset trading platforms like Kraken can simply “come in and register” with the agency. As most securities law experts know, there is not a single law on the books supporting this position. The SEC has promulgated no rule describing how an order in a digital asset should be matched, no guidance on how a trade should be cleared, and articulated no standards for how to broker a digital asset transaction. The allegation is hollow; there is no such thing as an exchange, broker dealer, or clearing agency for investment contracts. The SEC is demanding compliance with a regime that doesn’t exist.
Oh, great. Right when we’re on the verge of receiving our Mt Gox payouts.<p>Ah well, I knew it was too good to be true. The way not to be disappointed is to not get your hopes up involving money.
Uhh, what? I've always considered Kraken to be the most rules-abiding exchange - more so than Coinbase. They're quite shrewd in what they're willing to list.<p>I wonder if SEC is charging Coinbase soon, too?
> The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
The main issue I see now is that the SEC should charge himself for not bringing clarity in the space beyond all the scams and frauds.<p>It is ironic that now when you try to use some of the crypto services it asks you if you are in Iran, North Korea, US, etc... I don't think all they were in the same list before.
(I realize kraken is not a publicly traded company, but...) I want a reverse ETF of companies that sponsor Formula 1 teams, as they seem to attract lots of bottom feeders.
So much hubbub for something completely worthless going to zero anytime and has no use for anyone but criminals. Why does the SEC even care about something so inconsequential.
These are the same guys that encourage their employees to own guns and not tell anyone they work for them. I kind of expected their response to be "over my dead body" than anything reasonable.
Kraken has recruited a significant number of Rust developers, or at least individuals keen on learning Rust, over the past few years. This presents a good opportunity for other companies that adhere to legal standards to consider hiring these developers.<p>In 2020, I received an interview invitation from Kraken and subsequently received invitations five times in 2022. The engineering managers I conversed with took pride in having one of the largest Rust development teams in the tech industry, in addition to a substantial number of Go developers. Due to my professional experience with both languages, they expressed considerable interest in bringing me on board. However, I faced rejection twice after accepting two of their invitations in 2022. The first time was due to my preference for utilizing basic yet stable features in Rust, as opposed to the alpha features anticipated by their interviewers. The second rejection occurred because I did not exhibit sufficient interest in their crypto business. While this aligns with their business focus, it seemed like a convenient excuse, given that I had consistently communicated my limited interest in the product, and both the technology and hiring manager appeared to be accepting of that fact.<p>I mean, I don't necessarily align with Apple's mission, but I still got the job there.