XRP’s Path Amid SEC’s Lawsuit Spree as Kraken Joins Coinbase in the Fray

However, the SEC and Ripple Briefs, with respect to remedies, will likely have more impact.

SEC activity remains a focal point as investors await remedies-related discovery updates.

SEC Sues Kraken for Illegally Operating as a Securities Exchange

On Monday, investors reacted to the news of the SEC suing Kraken, among the largest crypto exchanges in the world. The SEC alleges Kraken operated an online crypto trading platform, acting as a broker, dealer, exchange, and clearing agency for crypto asset securities. The SEC also alleges Kraken commingled customer crypto assets and cash with its own.

Kraken CEO Dave Ripley had this to say,

“We strongly disagree with the SEC claims, stand firm in our view that we do not list securities, and plan to vigorously defend our position.”

Ripley added,

“As we have seen before, the SEC argues that Kraken FX should ‘come in and register’ with the agency when there is no clear path to registration. Its allegations are factually incorrect, contrary to law, and the wrong way to create policy in the United States. As an industry leader, we will stand up to these allegations and defend the crypto industry’s right to exist in the U.S.”

Ripley concluded,

“We believe Congressional action is the most appropriate path to resolving the lack of regulatory clarity in the U.S and will continue to support these efforts to bring clarity and certainty to the chaotic environment that has been created in the U.S.”

The SEC move against Kraken came as the SEC v Ripple case entered its final stage. Significantly, the SEC continues to claim crypto assets are securities. The markets expect the SEC to appeal the Programmatic Sales of XRP ruling at the end of the SEC v Ripple case.

Kraken joins a growing list of exchanges trapped in the SEC’s securities web.

The SEC filed charges against Binance and Coinbase (COIN) in June, 2023. The charges against Kraken are similar to those against Coinbase.

Coinbase Supporter Senator Lummis Reacts to SEC Charges

In August, Senator Cynthia Lummis filed an amicus curiae brief supporting the Coinbase motion to dismiss (MTD). Within the MTD, Coinbase argued the SEC lacked the statutory authority to regulate crypto exchanges.

Senator Lummis agreed with the Coinbase MTD. In the amicus curiae brief, Senator Lummis said,

“Through this case, the SEC seeks primary influence over economic, political, and legal questions under active consideration by Congress and multiple agencies. The SEC’s assertion of authority in this case is out of step with active legislative efforts.”

The Senator reacted to the Kraken news with a statement, saying,

“The SEC cannot continue ruling by enforcement. Crypto asset companies have repeatedly tried to get guidance from the SEC only to be hit with enforcement actions, causing unnecessary harm to consumers. It is time for Congress to pass a regulatory framework to provide clear rules to the SEC on what is a security and what is a commodity. The Lummis-Gillibrand Responsible Financial Innovation Act will rein in the SEC and allow financial innovation to thrive in the United States.”

If the Court grants the Coinbase motion to dismiss, Kraken would defend against the comingling charges. The latest SEC move makes the outcome of the SEC v Coinbase case even more significant.

Amicus Curiae attorney John E. Deaton believes the SEC would settle the Ripple case if the Court grants the Coinbase MTD. A similar outcome could be plausible regarding the exchange-related charges against Kraken.

XRP Price Action


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