Kraken vows to ‘vigorously defend’ SEC lawsuit amid Congressional support
CryptoSlateNov 21, 2023
The Facts
The US Securities and Exchange Commission (SEC) has sued Kraken crypto exchange for allegedly operating as a securities exchange without registering with the regulator.
The SEC's lawsuit claims that the San Francisco-based exchange mixed customer and corporate funds to the tune of up to $33B while operating as an unregistered broker, clearing agency, and dealer.
The Spin
Establishment-critical narrative
The SEC is overstepping its bounds and launching frivolous lawsuits to crack down on cryptocurrency exchanges. It's trying to prop itself up as the chief crypto regulator by inaccurately labeling crypto tokens and assets as securities. The regulator has no clue about digital assets, and it's acting before Congress has passed any laws on the matter. As no law requires Kraken or any other cryptocurrency exchange to register with the SEC, Kraken will defend itself in every way possible.
Pro-establishment narrative
Kraken has been illegally operating as a securities exchange without registering with the SEC and has also engaged in the scandalous commingling of customer and corporate funds. The FTX disaster served as a warning for the entire world, which is why the SEC must protect consumer assets from shady companies rife with conflicts of interest. The SEC has every right to regulate Kraken; it can't allow the exchange to deal freely without oversight.
Nerd narrative
There's a 50% chance that Bitcoin's percentage of total crypto market capitalization will be at least 41.2% in 2025, according to the Metaculus prediction community.