Kraken Files for Jury Trial, Argues Cardano Is Not a Security in Case Against SEC

Kraken took a stand against the SEC on Thursday, stating that the regulator’s claims that it offered unregistered securities were false.

Another exchange has taken a giant leap in a legal battle against the US Securities and Exchange Commission (SEC). This time, California-based Kraken has demanded a jury trial for allegations leveled against it by the US top regulator.

In a Thursday filing, Kraken denied the SEC’s accusations that it offered unregistered securities to US investors. The battle began in November 2023, when the SEC leveled those claims against the exchange.

Kraken asserted that the crypto assets the SEC classified as securities were not. Tokens like Cardano’s ADA, SOL, ALGO, MATIC, NEAR, FIL, MANA, FLOW, ICP, OMG, and ATOM were classified as securities by the Wall Street regulator.

According to the filing, Kraken stated that the SEC has not clarified why it categorized the assets as securities. The US-based platform insisted that the cryptocurrencies in question have not been proven to fail the Howkey test, a ruling widely used to determine which asset was a security.

Kraken Cites Regulatory Overreach

Per the Thursday filing, Kraken noted it had met a series of stumbling blocks in its effort to amicably resolve the allegations with the SEC; hence, the jury request. The exchange stated that the regulator has insisted on implementing unclear guidelines on its operation, citing a regulatory overreach.

Furthermore, Kraken stated that the SEC has yet to single out a part of its operations that was in line with the 2023 lawsuit. The exchange insisted on a lack of clarity as to which of its activities constituted offering investment contracts.

The US-based trading platform noted it doesn’t offer bonds or stocks, which are financial securities. However, it gives users a platform that allows them to buy digital assets, which are not classified as securities. Kraken saw its last effort to dismiss the SEC lawsuit rejected by the court.

Kraken Makes the Most of SEC’s Amended Filing

Kraken asserted that some of the terms used in the lawsuit were ambiguous and needed clarity on them. Among the words mentioned were “crypto asset securities,” “Kraken-Traded Securities,” “proprietary assets,” and “investors.”

The “crypto asset securities” term was one of the details the SEC filed to correct in its Thursday application. According to the regulator, the term did not imply that crypto assets are securities in themselves.

Kraken opted for a legal ruling, like Ripple, in contrast to eToro’s disposition. The Crypto Basic reported that the Israel-based exchange agreed to take on a new operational term in its settlement with the SEC. The firm would offer only Bitcoin, Ethereum, and Bitcoin Cash to US users and pay a fine of $1.5 million.