"SEC Drops Kraken Case: Crypto's New Dawn?"
1min read The U.S. Securities and Exchange Commission (SEC) has formally dropped its case against crypto exchange Kraken, marking a significant shift in the regulatory landscape for cryptocurrencies. The move comes after a prolonged legal battle that began in November 2023, when the SEC charged Kraken with operating an unregistered trading platform, a clear breach of security regulations.
Kraken's legal team celebrated the win by donating to the new leadership of the White House. The exchange had contended that the suit was politically motivated and added unwarranted volatility to the market. Notably, the dismissal came without any admission of fault, financial sanction, or necessary changes to the business of Kraken.
Kraken's legal defense against the SEC's claims centered on the agency's overreach in taking legal action without following proper regulations. The exchange initially requested to dismiss the case, but the judge at that time rejected the motion, causing the case to be prolonged until now. Even though the case was active, the SEC chose to drop it, signaling a change in the regulators' mood towards crypto companies.
This sudden dismissal follows the SEC's recent efforts to settle cases or investigations against other leading crypto platforms, such as coinbase, MetaMask, OpenSea, Gemini, and Robinhood. The move has given relief to many crypto platforms and investors, who believe this change will lift the crypto market to new heights.
Industry players have criticized the SEC's 'egulation by enforcement' approach, asserting that it has deterred innovation and investment. Kraken accused the SEC's move of not being for the protection of investors but rather of fueling regulatory uncertainty in already nascent markets. With the suit now settled, Kraken hopes to see a move towards more tangible, formalized policies that will provide stability to crypto companies.
This follows broader developments in the regulation of crypto in the U.S. Lawmakers recently filed a stablecoin bill aimed at increasing the penetration of the digital assets market by the U.S. dollar. There is also increased speculation over the filing of a broader bill regulating cryptocurrencies, one that will reach further than the scope of the FIT21 bill.
Kraken's courtroom win is just one piece of a larger trend of the SEC backing away from its more aggressive court fights with large crypto firms. During the tenure of SEC Chair Gary Gensler, the agency had been waging aggressive 