In its legal action against cryptocurrency exchange Kraken, the U.S. Securities and Exchange Commission (SEC) has classified sixteen cryptocurrency tokens as securities. A few of the purported cryptocurrency securities were the same ones that were emphasized in the SEC's litigation against Binance and Coinbase. "We strongly disagree with the SEC claims," emphasized Kraken's CEO, "and we plan to vigorously defend our position." The company does not list securities.
SEC Labels 16 Crypto Tokens as Securities
The U.S. Securities and Exchange Commission (SEC) designated sixteen cryptocurrency tokens as securities in its complaint against cryptocurrency exchange Kraken, which was filed on Monday. According to the regulator's complaint:
As of right now, Kraken allows users to trade cryptocurrency assets that have previously been the target of SEC enforcement actions due to their status as securities. These assets trade under the following symbols: ADA, AXS, ALGO, ATOM, CHZ, COTI, DASH, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, SAND, and SOL.
The regulator brought up the fact that a few of the previously stated cryptocurrency assets have been cited in a number of earlier court cases, including ones involving Bittrex, Coinbase, and Binance. Chairman of the SEC Gary Gensler has stated time and time again that, in his opinion, all cryptocurrency tokens—aside from bitcoin—are securities. XRP, however, is "not necessarily a security on its face," according to a recent court decision.
The SEC claimed that cryptocurrency assets such ICP, AXS, CHZ, FLOW, DASH, VGX, FIL, NEXO, NEAR, ADA, SAND, SOL, and MATIC satisfy the requirements for being investment contracts in its action against Coinbase in June. The securities regulator determined that 12 cryptocurrency tokens—BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI—are securities in a case filed against Binance that same month. In a case against Bittrex, the SEC declared in April that DASH, ALGO, TKN, NGC, and OMG are unregistered securities.
Dave Ripley, the CEO of Kraken, expressed his strong disagreement with the SEC's allegations on Monday on social media site X, saying, "We stand firm in our view that we do not list securities and plan to vigorously defend our position." Coinbase, like Kraken, has maintained that no cryptocurrency securities are listed on its platforms. Paul Grewal, the chief legal officer of Coinbase, claimed in July that the SEC's definition of a "investment contract" was illegal.
U.S. Senator Cynthia Lummis (R-WY) urged Congress to "pass a regulatory framework to provide clear rules to the SEC on what is a security and what is a commodity" following the SEC's action against Kraken. "The SEC cannot continue ruling by enforcement," she emphasized in reference to X. The SEC has frequently ignored the requests for assistance from cryptocurrency asset businesses, leading to needless harm to consumers in the process of enforcement actions.
How do you feel with the SEC's claim in the Kraken lawsuit that sixteen cryptocurrency assets are securities? Tell us in the space provided for comments below.