Are you siding with Kraken in their dispute with the SEC?

[KryptoBull]

The SEC has sued many companies in the crypto market: Binance, Coinbase, Ripple, LBRY and Kraken. Because LBRY and Kraken did not have the strong economic potential to pursue the lawsuit against the SEC's accusations, they surrendered. LBRY had to pay $111,614 in May 2023^[1], and Kraken also had to pay $30M in February 2023^[2].

At that time, many crypto community members did not support Kraken for accepting defeat so easily, but we can also sympathize with Kraken because they could not afford to pay $200M for the lawsuit with the SEC like what Ripple did^[3]. Everything seemed fine, until we and Kraken realized the SEC's full ambition, the SEC did not want to stop: The SEC alleges Kraken operates as an unregistered securities exchange, broker, dealer, and clearing agency for certain digital assets in Nov 2023. Obviously, despite receiving $30M, the SEC still wants to exploit Kraken's weakness instead of confronting other rich and strong companies.

This time, Kraken did not disappoint us: Kraken filed a motion to dismiss a lawsuit brought against them by the SEC on February 22, 2024.

Kraken contends that the SEC is overstepping its bounds. Kraken maintains that cryptocurrencies are not securities and that staking programs do not meet the criteria established by the Howey Test, a legal framework used to determine whether an investment qualifies as a security. Kraken argues that the SEC is attempting to regulate the crypto industry through enforcement actions rather than through clear and established rules^[4].

If Kraken prevails, it will be a blow to the SEC's attempts to exert control over the crypto market. It could also pave the way for clearer regulations specific to cryptocurrencies, fostering a more stable environment for both businesses and investors. So this time the crypto community did not let Kraken have to fight the SEC alone. The Blockchain Association, a crypto industry advocacy group, has joined the fray by filing an amicus brief in support of Kraken. They argue that the SEC is exceeding its authority and hindering innovation in the crypto space^[5].

The SEC has helped the crypto community become more connected, and helped us understand that: we cannot defend ourselves against the SEC by surrendering, the only way for us to survive is to fight together against the SEC's unreasonable accusations against the crypto market.

I am not a Kraken user, but after Kraken's courage, I love Kraken a lot more, similar to the love I have for the giant Ripple, and am willing to use Kraken's services. I will follow this SEC-Kraken lawsuit and wish Kraken victory: all for Kraken, all for the crypto future.

I want to hear your opinion about this drama:

• Is this lawsuit important for the development and future of crypto?
• What % chance do you think Kraken has of winning the lawsuit?
• Does this lawsuit motivate you to love and use Kraken's services?

References:
[1] Crypto Firm LBRY to Challenge Ruling It Violated U.S. Securities Law
[2] Crypto exchange Kraken settles with SEC for $30 million, will close U.S. staking operation
[3] Ripple will have spent $200 million fighting SEC lawsuit, CEO says
[4] The real story of the SEC’s suit against Kraken, and why Kraken is moving to dismiss the case
[5] Kraken Receives Blockchain Association’s Backing In SEC Battle
Thank MSAP.Rainbow team for suggesting this SEC-Kraken event and topic template on forums
Note:

• My opinion was posted first in that topic, on Bitcointalk
• I leave the source link to avoid plagiarism accusation.
• I excluded/ included minor things from an original thread ^{if necessary}.

[MrSpasybo]

I am not a Kraken user, but after Kraken's courage, I love Kraken a lot more, similar to the love I have for the giant Ripple, and am willing to use Kraken's services. I will follow this SEC-Kraken lawsuit and wish Kraken victory: all for Kraken, all for the crypto future.

I want to hear your opinion about this drama:

• Is this lawsuit important for the development and future of crypto?
• What % chance do you think Kraken has of winning the lawsuit?
• Does this lawsuit motivate you to love and use Kraken's services?

With the SEC, we can only stubbornly stand up and fight back. We should not easily be fined for unreasonable accusations that are beyond the authority and responsibility of the SEC. Kraken is the clearest proof of this: even paying a $30M fine cannot stay in peace for 1 year, and in the end still becomes a prey for the SEC to exploit and attack the crypto market.

1. I think this lawsuit is important because it could lead to results that have a major impact on the SEC-crypto relationship.

2. With community support and gaps in the regulatory framework that defines the nature of tokens, the SEC cannot win.

3. I am used to using other exchanges like Binance and Gate, but if Kraken expands its services in Vietnam, I will refer to it to split the risk across many CEXs.

[Cryptsafe]

For all I know, the sec is american government arm that are just after crypto currency projects to take in funds where they did not sow.
So far many big names in the crypto industry have been a victim of this and have really paid heavily to make sure they remain in the spotlight. They are just after crypto currency projects that have estabilished already and are running into billion dollars trading volume on daily basis so they could ake out something from them or possibly blackmail them in other to fine them huge amount for the fact that they have a good number of users from their country who uses the crypto project and are taking advantage of it to blacklist them if they fail to comply with them coupled with the fact that they have all it takes to frustrate their project.
It happened to binance and cz could not do anything but to pay the fine imposed on him just to let peace be and now they are demanding for his travelling documents under their custody through the court.

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.wsj.com/livecoverage/cpi-report-today-inflation-stock-market-03-12-2024/card/binance-founder-must-surrender-passport-judge-orders-4LG328V5oubRkzZdnRgn&ved=2ahUKEwiW2PmYhfmEAxXAUUEAHcCWAPEQFnoECBMQAQ&usg=AOvVaw3mWZN3ikDiGIvtKDFJ2LSN

[KryptoBull]

With the SEC, we can only stubbornly stand up and fight back. We should not easily be fined for unreasonable accusations that are beyond the authority and responsibility of the SEC. Kraken is the clearest proof of this: even paying a $30M fine cannot stay in peace for 1 year, and in the end still becomes a prey for the SEC to exploit and attack the crypto market.

1. I think this lawsuit is important because it could lead to results that have a major impact on the SEC-crypto relationship.

2. With community support and gaps in the regulatory framework that defines the nature of tokens, the SEC cannot win.

3. I am used to using other exchanges like Binance and Gate, but if Kraken expands its services in Vietnam, I will refer to it to split the risk across many CEXs.

According to what Kraken has presented, things are quite scary: Kraken was summoned to court to testify against the SEC's wrongdoings, and immediately afterwards Kraken received a notice from the SEC that they would be suing Kraken. This is a public retaliation that did not take long to come. The SEC playing dirty like this makes it reasonable for the crypto community to unite against them. There can be no compromise with Gary Gensler, who wants to control everything instead of promoting the development of the crypto market.

I'm just worried that Kraken doesn't have enough resources to fight the SEC. I hope the crypto community will provide legal, media, and financial support for this fight.

For all I know, the sec is american government arm that are just after crypto currency projects to take in funds where they did not sow.
So far many big names in the crypto industry have been a victim of this and have really paid heavily to make sure they remain in the spotlight. They are just after crypto currency projects that have estabilished already and are running into billion dollars trading volume on daily basis so they could ake out something from them or possibly blackmail them in other to fine them huge amount for the fact that they have a good number of users from their country who uses the crypto project and are taking advantage of it to blacklist them if they fail to comply with them coupled with the fact that they have all it takes to frustrate their project.
It happened to binance and cz could not do anything but to pay the fine imposed on him just to let peace be and now they are demanding for his travelling documents under their custody through the court.

The SEC has attacked EOS, LBRY, and Kraken to collect fines worth tens of millions of USD. I am not sure if that is the SEC's real purpose or if the SEC has a bigger plan to crack down on this market and the initial lawsuits are just a platform for bigger lawsuits in the future targeting Coinbase and Binance. Anyway, the SEC has become too dangerous and I hope the SEC will soon have a new crypto-friendly chairman like Gary Gensler.

CZ and Binance have compromised with the US Department of Justice, not the SEC. Although Binance is also being sued by the SEC, the lawsuit is relatively small and not really of concern. We will know more when the SEC and Binance face each other in court.

[bitterguy28]

Actually I don't care because never that I use kraken as I have heard a lot of issues  from this exchange in the past that's  why I keep my distance.
and besides what can our siding matter when Kraken is fighting against the biggest and strongest part of the government in terms of business running?

[TomPluz]

The SEC has helped the crypto community become more connected, and helped us understand that: we cannot defend ourselves against the SEC by surrendering, the only way for us to survive is to fight together against the SEC's unreasonable accusations against the crypto market.

I am not a Kraken user, but after Kraken's courage, I love Kraken a lot more, similar to the love I have for the giant Ripple, and am willing to use Kraken's services. I will follow this SEC-Kraken lawsuit and wish Kraken victory: all for Kraken, all for the crypto future.

I am not a Kraken user myself and I don't have a lot of details with this big exchange though I hear on this outfit in the news from time to time. I understand that it would be easier to settle things with SEC rather than go to court as the cost can be higher than negotiated compromise fees and this is in fact quite common in the world of business, not exclusive to cryptocurrency. However, in the opinion of many, SEC USA seems has this not-so-good mindset to go against any crypto platform whom they think they can do some lawfare with, now a common trait in the Biden administration. I am glad that this time around Kraken decided to instead make a good fight not just for itself but for the whole cryptocurrency industry. And I am really hoping that it can galvanized the whole cryptocurrency industry to side with it and fight SEC in the court of law so they can learn and hear of the voices we are espousing. The message from Kraken is quite clear: Enough is enough, let's win this fight to the finish.

[Kemarit]

The SEC has helped the crypto community become more connected, and helped us understand that: we cannot defend ourselves against the SEC by surrendering, the only way for us to survive is to fight together against the SEC's unreasonable accusations against the crypto market.

I am not a Kraken user, but after Kraken's courage, I love Kraken a lot more, similar to the love I have for the giant Ripple, and am willing to use Kraken's services. I will follow this SEC-Kraken lawsuit and wish Kraken victory: all for Kraken, all for the crypto future.

I am not a Kraken user myself and I don't have a lot of details with this big exchange though I hear on this outfit in the news from time to time. I understand that it would be easier to settle things with SEC rather than go to court as the cost can be higher than negotiated compromise fees and this is in fact quite common in the world of business, not exclusive to cryptocurrency. However, in the opinion of many, SEC USA seems has this not-so-good mindset to go against any crypto platform whom they think they can do some lawfare with, now a common trait in the Biden administration. I am glad that this time around Kraken decided to instead make a good fight not just for itself but for the whole cryptocurrency industry. And I am really hoping that it can galvanized the whole cryptocurrency industry to side with it and fight SEC in the court of law so they can learn and hear of the voices we are espousing. The message from Kraken is quite clear: Enough is enough, let's win this fight to the finish.

Just shows how trigger happy SEC is, or at least for this administration as we all know that the sitting majority is anti-crypto and so they put a lot of pressure on Kraken and other crypto exchanges.

But for us, being a crypto enthusiast, and even if we don't have account on Kraken, we will be behind them and hope that SEC will lose this case so that we will have another precedent of them having a losing record. This could be just the beginning for Kraken as this could also dragged for years. However, as you have said, let's win this fight for crypto enthusiast around the world.

[Faisal2202]

I want to hear your opinion about this drama:

• Is this lawsuit important for the development and future of crypto?
• What % chance do you think Kraken has of winning the lawsuit?
• Does this lawsuit motivate you to love and use Kraken's services?

Thanks for sharing the news with us, I was not aware of this case between Kraken and SEC. Well, after reading your post (supporting Kraken) I preferred to take the side of Kraken as well, I use Kraken for some alts not mostly by maybe a few times. BTW I don't like the exchange due to the high fee they have on withdrawals.

Well, speaking of the case, I would say.
1. This lawsuit is not important for the development of the crypto, as Kraken is not that big an exchange that its cases could impact the market as a whole. Well if we consider Binance's case then we might see a good impact because Binance is a big player.
2. IMHO I don't have any % in mind but chances are lower for Kraken to win against SEC.
3. I already was using Kraken so, even after this news, my emotions remains the same but I hope the Kraken would win the case.

[debra]

Is this lawsuit important for the development and future of crypto?

Is the lawsuit to bring good impact for crypto future?
I think the lawsuit only makes an obstacle for the future of crypto. SEC always tries to hamper crypto development. Luckily, crypto always keeps going the development, the lawsuit won't impact for a long term.

What % chance do you think Kraken has of winning the lawsuit?

Ripple and Binance have solved their problem with SEC. I believe Kraken will do the same. SEC may just wan to take the advantage of the lawsuit.

[TopT3ns]

Is the lawsuit to bring good impact for crypto future?
I think the lawsuit only makes an obstacle for the future of crypto. SEC always tries to hamper crypto development. Luckily, crypto always keeps going the development, the lawsuit won't impact for a long term.

Exactly, with the SEC, the aim is to try to control the circulation of cryptocurrency so that many whales will take advantage of whatever moment the SEC talks about cryptocurrency to raise and lower prices on exchanges.

[Cryptsafe]

For all I know, the sec is american government arm that are just after crypto currency projects to take in funds where they did not sow.
So far many big names in the crypto industry have been a victim of this and have really paid heavily to make sure they remain in the spotlight. They are just after crypto currency projects that have estabilished already and are running into billion dollars trading volume on daily basis so they could ake out something from them or possibly blackmail them in other to fine them huge amount for the fact that they have a good number of users from their country who uses the crypto project and are taking advantage of it to blacklist them if they fail to comply with them coupled with the fact that they have all it takes to frustrate their project.
It happened to binance and cz could not do anything but to pay the fine imposed on him just to let peace be and now they are demanding for his travelling documents under their custody through the court.

The SEC has attacked EOS, LBRY, and Kraken to collect fines worth tens of millions of USD. I am not sure if that is the SEC's real purpose or if the SEC has a bigger plan to crack down on this market and the initial lawsuits are just a platform for bigger lawsuits in the future targeting Coinbase and Binance. Anyway, the SEC has become too dangerous and I hope the SEC will soon have a new crypto-friendly chairman like Gary Gensler.

CZ and Binance have compromised with the US Department of Justice, not the SEC. Although Binance is also being sued by the SEC, the lawsuit is relatively small and not really of concern. We will know more when the SEC and Binance face each other in court.

I too have asked myself these questions as to know the genuity of the SEC because I really do not get their operations these days. Are they out to rake money from crypto companies or they are their to protect investors from being ruined.
They have striked and attacked many Crypto organisations sapping millions of dollars from them like don't tell anybody. It is such a frustrating situation and the SEC I think are just thee on their own not for the interest of the crypto community.

[Stompix]

Well, as in the other topic about Kraken in its own forum I will say it, I side with the SEC!

At one point people have to realize that we need to drop some misconceptions like SEC is the government bad, and Kraken deal with crypto is good!
If FTX had been involved in a lawsuit with the SEC some of you would have taken SBF side, how would have that looked 6 months later?
Binance fled Japan and Malta because of regulations, it turns out those regulations where about them not using a single balance and not playing with clients' money, have two accountings, one for the customer's funds that are not to be touched and one for their own. And people cheered for CZ and said Japan is the loser...

The point is, Kraken broke all the rules, they profited form tokens listing, they sold tokens, they tarded the same tokens they were issuing to customers, and now they play the card of those tokens not being securities, not being money, not being anything, it's crypto.
No, just because it's crypto-related not every shitty move that enriches exchanges and fleeces customers breaking the laws should be allowed!

[KryptoBull]

Well, as in the other topic about Kraken in its own forum I will say it, I side with the SEC!

At one point people have to realize that we need to drop some misconceptions like SEC is the government bad, and Kraken deal with crypto is good!
If FTX had been involved in a lawsuit with the SEC some of you would have taken SBF side, how would have that looked 6 months later?
Binance fled Japan and Malta because of regulations, it turns out those regulations where about them not using a single balance and not playing with clients' money, have two accountings, one for the customer's funds that are not to be touched and one for their own. And people cheered for CZ and said Japan is the loser...

The point is, Kraken broke all the rules, they profited form tokens listing, they sold tokens, they tarded the same tokens they were issuing to customers, and now they play the card of those tokens not being securities, not being money, not being anything, it's crypto.
No, just because it's crypto-related not every shitty move that enriches exchanges and fleeces customers breaking the laws should be allowed!

I only know that the SEC accuses Kraken of listing securities as some cryptos, which means that the SEC says that the tokens on that list are securities, including ADA, AXS, ALGO, ATOM, CHZ, COTI, DASH, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, SAND, and SOL. I don't believe that they are all securities, or at least they have never been officially declared by the SEC to be securities in a clear case.

We are not defending only Kraken CEX, we are defending the transparency of the crypto market. If the above tokens are declared to be securities, then many other tokens could also be concluded to be securities and subject to SEC regulation, which would be a disaster for this market.

[Stompix]

If the above tokens are declared to be securities, then many other tokens could also be concluded to be securities and subject to SEC regulation, which would be a disaster for this market.

Please ELI5 me why would this be a disaster for the markets?
Those are some tokens that take money straight from investors' pockets, they get the money just as any company, and they follow the same thing of promoting and selling those, they have control over it and they still have control over the coins as they can make it disappear or increase the circulating supply at a whim and you despite being a buyer have no protection against!

So even if assume let's say those coins are just "something", where would the disaster come if they are labeled securities?
I'm not joking, I'm dead serious on this, how would this turn into a disaster?

[KryptoBull]

Please ELI5 me why would this be a disaster for the markets?
Those are some tokens that take money straight from investors' pockets, they get the money just as any company, and they follow the same thing of promoting and selling those, they have control over it and they still have control over the coins as they can make it disappear or increase the circulating supply at a whim and you despite being a buyer have no protection against!

So even if assume let's say those coins are just "something", where would the disaster come if they are labeled securities?
I'm not joking, I'm dead serious on this, how would this turn into a disaster?

Currently, our understanding is that cryptocurrencies are considered commodities, meaning that altcoins are also commodities like BTC. If most altcoins are securities and regulated by the SEC, they will no longer be the same as BTC, and investor confidence will be affected. We can see a wave of altcoin sell-offs.

In addition, if they are securities, most CEXs will be accused of illegally listing and trading securities. Even if they agree to pay the fines, they will also lose the financial resources to develop and will have to comply with more regulations than they do now.

I do not see any positive impact on the market if these tokens become securities. That is also why we are happy that the XRP token is not a security.