KRAKEN FINALLY FIGHTED AND FILED A CLAIM TO DISMISS THE SEC'S LAWSUIT ON THE REASONS:
1- The SEC is using intimidation tactics by suing companies that speak out against their management practices at congressional hearings.
2- The SEC creates a 'dangerous precedent' of overreaching the limits of its power.
3- The SEC has no congressional power to regulate crypto
Detail:
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On May 10, 2023, before the House Financial Services Committee and the House Agriculture Committee, Kraken testified about the SEC's overreach in the crypto space and its regulatory approach by implementing enforce outdated SEC regulations. The next day, the SEC called Kraken to say they would sue. This is an act of retaliation.
The SEC alleges that Kraken offered unregistered securities, but the SEC's complaint does not specify which tokens are securities; instead, the SEC asks the court to accept a theory that there could be an investment contract. without a contract, without obligations to the seller, or even without any interaction between the issuer and the buyer.
This theory has no limiting principle. It would give the SEC unlimited power over collectibles, like sports memorabilia, trading cards, watches, even commodities like diamonds. This is an encroachment on the limits of power.
Furthermore, the SEC cannot show an explicit congressional mandate that it can regulate an issue of such ‘economic and political importance’ as crypto.
