In a significant move within the cryptocurrency sector, Kraken, a major crypto exchange, alongside the United States Securities and Exchange Commission (SEC), has filed a joint stipulation and proposed order. This legal action is a response to Kraken’s intent to object to a recent ruling that favored the SEC. The court filing, dated December 23, marks a pivotal moment in the ongoing engagement between the two entities.
Parties File Joint Statement
On November 19, 2024, both parties involved—the plaintiff, US SEC, and the defendants, Payward Inc and Payward Ventures (collectively known as Kraken)—submitted a joint statement concerning a discovery dispute. This dispute revolves around the SEC’s resistance to Kraken’s requests for documents relating to three key areas: Bitcoin and Ether, the SEC’s public statements about digital assets, and the SEC’s internal trading policies regarding digital assets.
Despite the court delegating all discovery disputes to Magistrate Judge Robert M. Illman, who ruled against Kraken’s request to compel document production, Kraken maintains that these documents hold significant relevance to their case. This ongoing legal battle underscores the complexities involved in regulating digital currencies and the importance of transparency in the SEC’s operations.
SEC, Kraken Agree To Stay Deadline
The original deadline for filing objections to the court’s order was set for December 30. However, Kraken has planned to resubmit refined requests for document production that align with the court’s directives. Importantly, both Kraken and the SEC have mutually agreed to extend the deadline for filing objections until March 31, 2025. This extension allows both parties additional time to negotiate a possible further extension and potentially reach a resolution.
Kraken is represented by the esteemed attorney Matthew C. Solomon, noted for his involvement in high-profile legal cases. His track record includes the successful defense of Ripple CEO Brad Garlinghouse, achieving dismissals of various claims. Kraken’s legal strategy includes seeking an order that compels the SEC to produce documents explaining the exclusion of Bitcoin and Ether from their complaint, despite their similarity to other traded tokens on the Kraken platform. The magistrate judge, however, found this line of argument unconvincing.
Furthermore, Kraken, alongside other industry stakeholders, has highlighted the significance of former SEC official William Hinman’s speech. This speech is pivotal in determining Bitcoin and Ether’s status under federal securities laws. Kraken has also invoked the fair notice defense and the major questions doctrine in its legal proceedings.
Ripple CLO Calls For End To The Ripple vs SEC Lawsuit
In related industry news, Stuart Alderoty, Chief Legal Officer of Ripple, has recently called for a conclusion to the ongoing Ripple vs. SEC lawsuit. Alderoty has urged the upcoming Trump administration to address what he describes as the “lingering stain of Hinman” within the SEC. He emphasized the need for restoring trust and repairing the perceived damages caused by previous regulatory actions. This call for resolution reflects the broader sentiment within the crypto community for clearer regulatory guidance and fairness.
The unfolding legal scenarios between Kraken and the SEC, as well as Ripple’s ongoing case, highlight the dynamic and often contentious relationship between regulatory authorities and the cryptocurrency industry. As these cases progress, they are likely to set important precedents for future regulatory frameworks surrounding digital assets.
