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US Senator Criticizes SEC’s Regulatory Approach over Kraken, Calls for Clear Crypto Rules

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SEC Files Lawsuit Against Kraken

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Kraken, a San Francisco-based cryptocurrency exchange, for allegedly operating an unregistered trading platform. The lawsuit claims that Kraken violated securities regulations and put investors at risk.

Senator Lummis Voices Displeasure

US Senator Cynthia Lummis has criticized the SEC's handling of the Kraken case, stating that the agency is targeting the exchange without clear cryptocurrency rules. She emphasizes the need for precise regulatory jurisdiction instead of enforcement actions that harm consumers unnecessarily.

Call for Clear Rules

Senator Lummis has called on Congress to establish clear rules for the SEC regarding security assets and commodity assets. She believes that the Lummis-Gillibrand Responsible Financial Innovation Act will provide a regulatory framework that allows financial innovation to thrive in the United States.

Increased Urgency for Crypto Legislation

The dispute between the SEC and Kraken highlights the broader issues facing the cryptocurrency sector. Crypto companies seeking guidance often face enforcement actions, leaving customers in uncertain territory. Senator Lummis's proposal for more specific restrictions underscores the need for organized crypto legislation.

SEC's Complaint

According to Kraken, the SEC's complaint does not allege fraud, market manipulation, customer losses, or hacking. The complaint argues that Kraken needs specific securities licenses to operate, as the digital assets it provides are considered investment contracts. However, Kraken disputes this claim, stating that it is incorrect, false, and disastrous.

Related Reading: After Kraken, These Crypto Companies Could Be Targeted Next By SEC