SEC Drops Lawsuit Against Kraken Without Charges

The United State Securities and Exchange Commission (SEC) has agreed to drop its lawsuit against cryptocurrency exchange Kraken. This decision comes after the SEC sued Kraken alleging it operated as an unregistered securities exchange, broker, clearing agency, and dealer.

Kraken Won’t Pay FInes 

As part of the agreement, Kraken won’t admit to any wrongdoing, pay penalties, or alter its business operations. The case will be dismissed with prejudice, this means that it can’t be refiled. This outcome is seen as a significant victory for Kraken and the broader crypto industry, potentially marking a shift in the SEC’s approach to regulation.

The SEC filed a lawsuit against cryptocurrency exchange Kraken in November 2023. Kraken had contested the charges, calling them baseless and politically motivated, and a federal judge had ruled that the case had enough merit to proceed to trial.

However, in a surprise move, the SEC has decided to dismiss the lawsuit, pending approval from its commissioners. Kraken has welcomed the decision, saying it marks a significant turning point for the crypto industry in the United States.

The company also has expressed optimism that the decision may signal the end of an era of contentious legal battles between federal agencies and digital asset platforms. Kraken has also praised the new leadership at the White House and the SEC, saying it appreciates their role in bringing about the change.
Kraken has committed to working with policymakers to develop

transparent regulations that support consumer protection while allowing for technological advancement. The company sees the dismissal of the lawsuit as a positive step towards achieving this goal.

Trump Administration’s SEC Policy Brings Relief to Crypto Industry

Kraken’s recent victory marks a significant turning point in the SEC’s approach to crypto regulation. The agency, under former Chair Gary Gensler, had been pursuing lawsuits against major crypto firms, claiming most digital assets were unregistered securities. His “Regulation With Enforcement” Strategy adopted hindered the innovation of digital assets.

However, with the change in leadership, the SEC is shifting gears. The agency has dropped multiple lawsuits and investigations, including cases against Consensys, Uniswap, Robinhood, and OpenSea.

This change in approach aligns with President Donald Trump’s broader regulatory strategy. His nominee for SEC chair, Paul Atkins, is known for his pro-crypto stance. While Atkins awaits confirmation, acting SEC Chair Mark Uyeda has already begun scaling back enforcement efforts.

The SEC has also created the Cyber and Emerging Technologies Unit (CETU) to combat crypto fraud, rather than enforcing sweeping industry crackdowns.