Legal officers from Ripple and Kraken criticize the SEC after a Federal Court ruling dismisses claims that crypto tokens on Kraken are securities, challenging the SEC’s regulation strategy.
Bollywood Fever: The chief legal officers at cryptocurrency giants Kraken and Ripple have expressed their views on a recent decision by the Federal Court for the Northern District of California in the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Kraken.Â
The court’s ruling, which denied the SEC’s claim that certain crypto tokens traded on Kraken’s platform are securities, has sparked significant commentary from the crypto community.
Marco Santori, Kraken’s chief legal officer, highlighted the court’s decision as a major victory for Kraken and the broader cryptocurrency industry. Today, the Federal Court for the Northern District of California ruled, as a matter of law, that none of the tokens trading on Kraken are securities,” Santori stated.
He emphasized that this ruling supports Kraken‘s long-standing position that it does not list securities, adding that the court criticized the SEC’s definition of “crypto asset security” as “unclear at best and confusing at worst.”
Santori also noted that the court made a crucial distinction, similar to one made in a previous case involving Ripple: while a token itself isn’t a security, agreements surrounding the token could be classified differently.
He warned of the potential negative impacts of the SEC’s enforcement-based regulatory approach, which he believes could lead to costly and time-consuming investigations for the crypto industry.
Santori urged Congress to step in and establish a clear market structure framework to foster blockchain innovation and regulatory clarity.
Ripple’s chief legal officer, Stuart Alderoty, echoed Santori’s sentiments on social media, stating:
“Another court, this time in the Kraken case, confirms there’s no such thing as a ‘crypto asset security.’ Bad news for the SEC, whose entire regulation-by-enforcement strategy hinges on that failed premise.”
The ruling represents another setback for the SEC, challenging its approach to regulating the rapidly evolving cryptocurrency market and reinforcing the need for clearer legislative guidelines.
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