- The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss its lawsuit against cryptocurrency exchange Kraken with prejudice, according to the exchange
- The decision involves no admission of wrongdoing, no penalties, and no changes to Kraken’s business operations
- The exchange is the latest in a long line of Gary Gensler-era enforcement attempts that have now been abandoned
OG exchange Kraken has revealed that the U.S. Securities and Exchange Commission (SEC) has agreed to dismiss its lawsuit against the firm, making it the latest crypto exchange to benefit from the new administration. Kraken says that the dismissal came with prejudice, meaning the case cannot be refiled and notably includes no admission of wrongdoing, no financial penalties, and no mandated changes to Kraken’s business practices. Kraken joins the likes of Coinbase, Binance, and Robinhood in having investigations or lawsuits dropped as the SEC reprioritises under its new leadership.
Allegation of Sales of Securities
The SEC initiated legal action against Kraken in November 2023, alleging that the exchange had been operating as an unregistered securities exchange, broker, dealer, and clearing agency. The regulator claimed that Kraken’s activities deprived investors of significant protections associated with registered entities.
Kraken consistently disputed these allegations, maintaining that its operations were lawful and transparent, and vowed to fight.
The exchange put out a press release Monday titled “A win for fairness,” in which it expressed strong approval of the SEC’s decision to dismiss the lawsuit:
The SEC’s decision to dismiss its lawsuit against us (and many others) is more than just a legal victory — it’s a turning point for the future of crypto in the U.S.
The post further criticized the previous regulatory approach, asserting that the lawsuit “undermined a nascent industry that repeatedly urged clear rules of the road.”
The Tide Continues to Change
The dismissal of the lawsuit against Kraken is part of a broader trend of regulatory shifts under the current U.S. administration. The SEC has also dropped or paused enforcement actions against other prominent cryptocurrency entities, including Coinbase and Binance, as part of a desire to move away from the stringent enforcement actions characteristic of the previous administration, potentially fostering a more innovation-friendly environment for the cryptocurrency industry.
Looking ahead, Kraken emphasized the importance of establishing a stable and predictable regulatory framework to encourage responsible growth and ensure the U.S. remains competitive in the global digital asset economy. The company also expressed its commitment to collaborating with policymakers and regulators to develop guidelines that protect consumers while fostering technological progress.
This sentiment aligns with the SEC’s recent initiatives to engage more constructively with the cryptocurrency industry, including the formation of a Crypto Task Force and the organization of public roundtable discussions aimed at clarifying regulatory expectations.
