Kraken wins – SEC drops lawsuit, ends campaign
Kraken wins – SEC drops lawsuit, ends campaign
Great news for Kraken! The cryptocurrency exchange announced on March 3rd that the US Securities and Exchange Commission has agreed to drop its lawsuit against them. Kraken sees this as the end of what they describe as a “wasteful, politically motivated campaign,” and a positive step that “clears the path toward a stable, forward-thinking regulatory regime.”
Kraken highlighted that the SEC is dismissing the lawsuit “with prejudice,” meaning it’s done for good. They emphasized that this comes with no admission of wrongdoing from Kraken, no fines paid, and no changes required to their business operations. You might recall that the SEC initially sued Kraken back in November 2023, claiming they were operating as an unregistered broker, dealer, exchange, and clearing agency.
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Many in the crypto industry have criticized the SEC’s approach under Gary Gensler. His leadership saw the agency frequently use enforcement actions – lawsuits and investigations – against crypto companies like Coinbase, Uniswap, and OpenSea, often for a variety of different issues. This “regulation by enforcement” strategy was widely seen as stifling innovation and unfairly targeting legitimate players in the crypto space, instead of focusing on actual bad actors.
Kraken believes this whole case, and others like it, were never really about protecting investors in the first place. They argue, “This case was never about protecting investors — it and other enforcement actions clouded instead of clarified. It undermined a nascent industry that repeatedly urged clear rules of the road.”
A shifting regulatory climate
It appears the tide might be turning. Since a shift in SEC leadership (implied, but not explicitly stated in the original text), we’re seeing a trend. The agency has either dismissed or is reportedly planning to drop a number of lawsuits and investigations that were initiated during Gensler’s time. Just recently, on February 27th, the SEC dropped its lawsuit against Coinbase. Before that, similar actions were taken regarding Consensys, Uniswap, OpenSea, Gemini, and Robinhood.
These developments are happening as the US seems to be moving towards providing more regulatory clarity for digital assets. For example, on February 7th, US lawmakers introduced a stablecoin bill with the aim of strengthening the dollar’s dominance in the digital realm. There’s also growing anticipation that lawmakers may introduce a broader crypto regulation bill, potentially a stronger version of FIT21.
