The chair of the US Securities and Exchange Commission (SEC), Gary Gensler, is in the news again following the SEC’s latest lawsuit filed against Kraken, a leading crypto exchange.
Another Legal Tussle
The United States Securities and Exchange Commission (SEC) has thrown another challenge at players in the crypto industry after suing the renowned crypto exchange Kraken. The latest legal storm resulted from the SEC’s conviction that Kraken operated as an unregistered exchange, broker, dealer, and clearing agency.
Furthermore, the regulatory agency alleged that Kraken recklessly mixed customer assets with its own. Following this shocking announcement, the digital community (including executives of top crypto platforms and the exchange itself) has started expressing their views on various social media platforms.
Kraken’s founder, Jesse Powell, called the SEC’s move an “assault on America,” portraying the regulatory body as a peak of malice. Powell also warned other businesses to consider exiting the country, claiming that the regulatory crackdown will not stop soon.
Crypto Community Fights Back
Meanwhile, Kraken’s CEO, Dave Riley, issued a statement on his X account, stating the company’s rejection of the SEC’s allegations. Ripley added that the company will make a solid legal defense to challenge the SEC’s claims and safeguard the crypto industry in the US.
He underscored the critical importance of regulatory clarity, emphasizing that resolution depends on decisive action from the US Congress. Nevertheless, prominent crypto legal expert John Deaton shared his insights.
Deaton said the Gensler-led SEC is a “despicable and dishonorable regulator and referenced Kraken’s agreement with the SEC to pay $30 million in February 2023. He also said Gensler has ulterior motives beyond his claims of investor concerns and can’t wait for the SEC chair’s tenure to be over.
In addition, crypto criminal defense attorney Carlo D’Angelo provided legal insight into the matter. D’Angelo doubts that the SEC has any advantage when the court case starts, forecasting an uncertain outcome for the regulatory body.
Legislative Support
The SEC’s aggressive stance on cryptocurrency has sparked widespread criticism owing to the absence of concise legislation governing digital assets and exchanges within the existing legal framework. Within the regulatory circle, voices of support are emerging from unexpected places.
Recall that Senator Cynthia Lummis criticized the SEC’s approach, highlighting the dangers of “rule by enforcement.” Lummis reiterated the frustrations of crypto companies seeking regulatory clarity, citing failed attempts to seek guidance from the SEC.
Also, US Representative Tom Emmer has proposed defunding the SEC’s aggressive anti-crypto campaign. Emmer’s move is one way of limiting the regulatory body’s crackdown on entities in the rapidly growing crypto landscape.
The statements from these lawmakers reflect a growing belief that the SEC’s stringent measures may be counterproductive in an environment devoid of comprehensive regulatory guidelines. Meanwhile, observers noted that industry players seek clear operational frameworks in the digital assets landscape.
Hence, their calls for a more transparent, collaborative approach to cryptocurrency regulation.