The US Securities and Exchange Commission (SEC) has filed a motion in the Northern District Court of California to dismiss key defenses presented by Kraken, a digital asset exchange, in an ongoing legal dispute. The SEC argues that Kraken received prior fair notice when it charged the exchange with violating securities laws by offering crypto assets as “investment contracts.” The agency seeks to eliminate Kraken’s claims of the major questions doctrine and due process violations, which Kraken argues are critical for protecting its operations from regulatory overreach.
The SEC contends that Kraken was adequately warned about the potential classification of its crypto offerings as securities and insists that its insistence on lacking regulatory clarity is “without merit.”
This motion builds on the SEC’s argument that federal securities laws apply to digital assets offered as investments, a stance that has fueled multiple regulatory clashes with crypto firms.
The SEC’s motion arrives amid speculation that Chair Gary Gensler could soon step down following the precedent of SEC chairs leaving office during a change in administration. Kraken’s attorney, Michael O’Connor, criticized the SEC’s timing and intent in filing the motion, calling it an “Election Day gambit,” and expressed confidence that Kraken’s defenses would withstand scrutiny.
