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The cryptocurrency exchange Kraken has filed a formal request for a jury trial in its lawsuit against the Securities and Exchange Commission (SEC) of the United States. This comes after a California judge’s recent decision to support the SEC’s lawsuit against Kraken. Similar cases have been filed by the SEC against Coinbase and Binance, alleging that these platforms violated federal securities laws by not registering as exchanges, clearinghouses, or brokers.
In November, the SEC sued Kraken in the Northern District of California, seeking to stop the exchange from violating securities regulations. The SEC requested disgorgement of alleged “ill-gotten gains” and other penalties. They specifically listed ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL tokens as unregistered securities.
In its response, Kraken firmly denied these allegations, maintaining that it had not engaged in illegal activities. The exchange also presented 18 defenses, arguing the SEC lacked authority to regulate its operations. Kraken emphasized that neither the Securities Act nor the Exchange Act includes digital assets in their scope, asserting that its platform did not qualify as an exchange, broker-dealer, or clearinghouse under those laws.
Kraken contends the SEC has no legal basis to demand regulatory oversight over its platform. The firm argued that digital assets should not be classified as securities, as they do not share the characteristics of traditional financial assets like stocks or bonds. Additionally, Kraken highlighted that it offers a wide range of services, including margin trading and over-the-counter transactions, but insists these offerings do not transform it into a securities exchange.
Kraken also criticized the SEC for acting without providing due process or fair notice. The company suggested the agency had infringed on Kraken’s First Amendment rights.