Crypto Exchange Kraken files for the dismissal of SEC’s lawsuit against it

Crypto exchange Kraken has countered the U.S. Securities and Exchange Commission in their ongoing legal feud. Kraken claims that the SEC stretched the definition of a contract and failed to allege fraud in its lawsuit against the crypto exchange.

Kraken wants the case dismissed, kicking against the SEC’s lawsuit, filed in the Northern District of California. Kraken argues that cryptocurrencies should be treated like commodities and not securities.

The SEC sued Kraken last November, alleging it did not register as a broker, clearinghouse or exchange. The SEC also accused the company of commingling customer and corporate funds.

As part of its argument, Kraken said the SEC did not meet the requirements set out by the Howey Test, a Supreme Court precedent used as a benchmark for identifying securities.

In a blog post, Kraken also said the SEC is overstepping its jurisdiction, arguing in the filing that there is a Major Questions Doctrine issue.

Kraken is yet address allegations by the SEC that it commingled customer and corporate funds. The SEC had used the alleged commingling as an example of conduct that wouldn’t be allowed for registered entities.

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