TL;DR
- SEC Sues Kraken: The SEC has initiated a lawsuit against Kraken for operating without proper securities registration.
- Shift in SEC’s Strategy: Noticing a change, legal expert Mike Selig suggests the SEC is now using multiple district courts for crypto case evaluations, possibly due to concerns over losing cases like its ongoing battle with Ripple.
- XRP Not Targeted: In its recent actions, the SEC didn’t label Ripple’s XRP as a security.
Here is Why the SEC Changed Its Approach
The US Securities and Exchange Commission (SEC) has once again attacked the cryptocurrency industry, filing a lawsuit against the digital asset exchange Kraken. It alleged that the latter has been operating as an unregistered securities exchange, broker, dealer, and clearing agency.
It is worth mentioning that Kraken is not the only crypto firm the SEC has beef with. Previously, the regulator sued Ripple, Binance, and Coinbase, accusing them of breaching several securities laws.
However, the SEC’s approach in the latest lawsuit seems to be different than the ones before. One person who observed that is legal expert Mike Selig. He believes the watchdog has changed its strategy and has involved numerous district courts to “evaluate the security status of crypto secondary sales” because it is “worried” it might lose the case.
After Ripple, seems SEC is worried it will lose more crypto cases and playing the numbers game. With its complaint against Kraken, we have 3 district courts that will evaluate the security status of crypto secondary sales (SDNY, DDC, NDCA). Supreme Court may decide it all.
— Mike Selig (@MikeSeligEsq) November 20, 2023
Recall that the legal battle with Ripple seems to be going in favor of the blockchain enterprise, which has already secured three major (yet partial) court victories. The outcome of the three-year lawsuit is expected to be determined in a grand trial next spring.
XRP Was Not Labeled a Security This Time
Apart from claiming that Kraken has breached some laws, the SEC also maintained that the exchange had offered trading services with unregistered securities such as Solana (SOL), Cardano (ADA), Polygon (MATIC), and many other altcoins.
Interestingly, this time, it did not include Ripple’s native token – XRP – in the list. This could be one reason why the asset’s recent price downtrend is not as severe as the one observed with other digital currencies.
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