- SEC agrees to dismiss civil lawsuit against Kraken with no admission of wrongdoing, penalties, or business changes.
- Kraken calls the dismissal a “turning point” that ends a “politically motivated campaign” against cryptocurrency innovation.
- The dismissal follows a broader pullback on crypto oversight under the Trump administration, which also saw a similar case against Coinbase end last week.
Kraken, the world’s 10th-ranked cryptocurrency exchange, announced Monday that the US Securities and Exchange Commission (SEC) has agreed in principle to dismiss its lawsuit that had accused the platform of operating as an unregistered securities exchange. The dismissal comes with no penalties, no admission of wrongdoing, and allows Kraken to continue its operations unchanged.
The agreement represents a significant victory for the crypto industry amid shifting regulatory winds in Washington. The dismissal is with prejudice, meaning the SEC cannot refile the same charges in the future.
In a statement published on its corporate blog, Kraken characterized the SEC’s original lawsuit as part of a “wasteful, politically motivated campaign” initiated during President Biden‘s administration that had “stifled innovation and investment” in the cryptocurrency sector.
“This case was never about protecting investors,” Kraken asserted in its statement. “It undermined a nascent industry that repeatedly urged clear rules of the road.”
The exchange specifically acknowledged the impact of leadership changes both at the White House and Commission level that contributed to this regulatory pivot, stating: “We appreciate the new leadership both at the White House and the Commission that led to this change.”
The SEC lawsuit, filed in November 2023, was part of former SEC Chair Gary Gensler’s aggressive campaign to bring cryptocurrency platforms under traditional securities regulations. The agency had alleged that Payward and Payward Ventures, operating as Kraken, had since 2018 earned hundreds of millions of dollars by facilitating trades of 11 crypto assets while ignoring securities laws. The complaint also cited deficient internal controls and record-keeping practices.
Like most cryptocurrency businesses, Kraken maintained that digital assets should not be classified as investment contracts subject to SEC oversight. Despite this position, a federal judge in San Francisco had denied the exchange’s motion to dismiss the case in August.
The dismissal of the Kraken case follows a clear pattern of regulatory retreat under President Trump’s administration. Just last week, the SEC ended a similar lawsuit against Coinbase, America’s largest cryptocurrency exchange, and indicated it may resolve fraud charges against Chinese entrepreneur Justin Sun, who advises a Trump-supported crypto project.
Further cementing this regulatory shift, Trump has nominated Paul Atkins, a Washington lawyer viewed as favorable toward digital assets, to replace Gensler as SEC chair.
According to cryptocurrency analytics platform CoinMarketCap, Kraken ranks tenth among global cryptocurrency exchanges based on traffic, liquidity, trading volumes, and confidence in reported transaction data.
The SEC declined to provide any comment when approached regarding the dismissal.
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