Kraken has joined the list of exchanges targeted by the United States regulators. On Monday, the U.S. Securities and Exchange Commission filed a lawsuit against Kraken over alleged securities law violations. According to the regulatory body, most of the crypto assets available through Kraken are securities.
“Without registering with the SEC in any capacity, Kraken has simultaneously acted as a broker, dealer, exchange, and clearing agency concerning these crypto asset securities. In doing so, Kraken has created risk for investors and taken in billions of dollars in fees and trading revenue from investors without adhering to or even recognizing the requirements of the U.S. securities laws that are designed to protect investors,” the SEC wrote in a court filing.
XRP Missing
Surprisingly, the SEC did not include XRP among the alleged securities. However, the regulator listed other assets such as ADA, MATIC, NEAR, COTI, CHZ, ALGO, ATOM, FIL, AXS, and other tokens.
The SEC omission of XRP in this lawsuit is not new. In lawsuits against Coinbase and Binance, the regulator also failed to mention XRP among the alleged securities. These incidents solidify the common belief that XRP is the only crypto asset with legal clarity in the U.S.
Possible Reason for XRP Exclusion
Ripple’s recent regulatory victory may have played a huge role in the SEC’s action. Recall that the watchdog charged Ripple and its executives for conducting unregistered securities sales involving XRP in 2020. After over two years of legal tussle, a federal judge ruled in favor of Ripple stating that the asset in itself is not a security, but a digital token.
Notably, Kraken had suspended support for XRP shortly after the SEC charged Ripple. However, the exchange resumed support for the asset following the recent ruling.
The legal ruling practically makes XRP the only crypto asset that has gone through trial and received full regulatory clarity. Furthermore, the ruling renewed hope in the crypto community at a time when the SEC’s actions against the industry had triggered concerns about regulation by enforcement.
In response to the SEC’s recent charges, Kraken said it disagrees with the authority’s claims and therefore plans to vigorously defend itself against the allegations.
