Chamber of Digital Commerce Files Brief on Behalf of Kraken in Controversial SEC Case

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Julia Smith

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Julia Smith

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Julia is an experienced editor with a passion for covering a wide variety of beats. She loves all things politics and regularly covers regulatory updates on emerging technology here for Crypto News.

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February 29, 2024 13:02 EST

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In a new development for the emerging U.S. cryptocurrency regulation landscape, the Chamber of Digital Commerce has voiced its backing for Kraken amid the exchange’s ongoing legal battle with the SEC.

This support was conveyed in February 27 court filing, as Kraken continues to counter allegations from the SEC that it operated unlawfully.

According to the new amicus curiae brief, the Chamber of Digital Commerce states that the SEC’s lawsuit alleging Kraken operated as an unlicensed securities exchange, broker, dealer, and clearing agency “poses a threat to the potential for sustained growth and success of the trillion-dollar blockchain community, the millions of people who participate in crypto markets, and the hundreds of crypto companies like Kraken that have attempted in good faith to comply with federal and state law as they innovate in a transformative industry.”

Kraken SEC Legal Challenge Overview

Originally filed in November 2023, the federal agency’s lawsuit alleges that Kraken “made hundreds of millions of dollars unlawfully facilitating the buying and selling of crypto asset securities” since September 2018.

1/ We're stepping in. We've filed an amicus curiae brief in the @SECgov v. @Kraken case. Our goal? To end the SEC’s attempt to regulate the #digitalasset industry WITHOUT legislative authority.https://t.co/tJ5oAwM8D2 pic.twitter.com/FclcrZWYjL

— The Digital Chamber (@DigitalChamber) February 27, 2024

The SEC has come under fire for its regulation-by-enforcement approach, doling out a string of lawsuits against crypto firms in recent years. Coinbase is currently locked in a similar legal battle with the SEC over the classification of tokens sold on the platform.

“Such a dramatic, new application of regulatory power will also inevitably cause entire organizations to abandon blockchain technology altogether or shift operations out of the United States to avoid the burden the SEC seeks to impose,” the Chamber of Digital Commerce’s latest brief alleges.

SEC’s Approach Sets A “Dangerous Precedent For Agency Overreach”

News of the crypto trade association’s amicus curiae brief comes just one week after Kraken filed to dismiss the SEC’s lawsuit, claiming that the litigation sets a “dangerous precedent for agency overreach.”

Following news of the latest SEC lawsuit, Kraken CEO Jesse Powell called the SEC “masochists” who were “back for seconds” following the crypto exchange’s $30 million settlement with the federal agency in February 2023 for their crypto staking-as-a-service program. Similarly, Kraken CEO Dave Ripley took to X to express his grievances over the litigation.

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.

As we have seen before, the SEC argues that @krakenfx should “come in and register” with the agency, when there is no clear path to…

— Dave Ripley (@DavidLRipley) November 21, 2023

“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,” said Ripley.

Advancing Global Crypto Adoption

Known as “the world’s leading blockchain and digital asset trade association,” the Chamber of Digital Commerce consists of over 200 players in the blockchain industry across the globe with the mission of promoting the adoption of cryptocurrencies.

Representatives from Kraken were not immediately available to respond to comment.