The United States Securities and Exchange Commission (SEC) requested a verdict in its case against the cryptocurrency exchange Kraken. In this request, the SEC targeted defenses such as “fair notice” and the “substantial questions doctrine.”
Purpose and Scope of the Case
With this move, the team, led by SEC chairman Gary Gensler, aims to limit further scrutiny of regulatory policies affecting the crypto industry. The timing of the filing is seen within the industry as a strategic attempt to disguise the SEC’s methods.
Kraken uses the “fair notice” defense in the lawsuit, claiming it did not receive adequate regulatory guidance regarding its crypto activities. He also argues that under the “important questions doctrine,” regulatory agencies like the SEC should not make major policy decisions without clear direction from Congress.
SEC’s Strategy and Previous Cases
The SEC’s move was met with criticism from Kraken and other crypto advocates that the agency’s policies were inconsistent and unclear. A similar request, Ripple 
$0.535562 It was also presented in the case, but the SEC could not get a verdict in that case.
“We expect a similar outcome in the Kraken case, but Kraken will have additional defenses if this claim proceeds,” -Michae O’Connor, Kraken attorney.
Kraken stated that it had additional defenses to oppose the SEC’s request. Uncertainty continues in the industry about how the case will progress and conclude.
The SEC’s role and regulations in the cryptocurrency market can have significant impacts on the industry. The Kraken case serves as an indicator for future regulatory approaches. On the other hand, this whole “regulation through sanctions” story may soon come to an end with Gensler resigning before Trump takes office. Trump won the election, promising a clear regulatory framework for cryptocurrencies and a crypto-friendly president to head the SEC. Moreover, Republicans gained the majority in the Senate and the House of Representatives.
As a result, regulations and legal processes in the Crypto sector are critical for the stability and development of the market. The outcome of the Kraken case will determine what balance will be struck between other crypto exchanges and regulatory bodies.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
