Kraken denies SEC claims, argues digital assets aren’t securities: Law Decoded

Sep 15, 2024

Crypto exchange Kraken has responded to the United States Securities and Exchange Commission’s claim that it had violated federal securities laws.

In the legal filing dated Sept. 12, the crypto exchange denied the SEC’s allegations, stating that the assets the regulator cited did not meet the legal definition of securities.

Kraken stated in the filing that it did not violate “Sections 5, 15(a) and 17A of the Securities Exchange Act of 1934” because the cited assets were “not securities or investment contracts.”

The assets cited in the SEC’s allegations included Solana’s SOL

SOL$142.63

Solana

Change (24h)

0.67%

Market Cap $69.40B

Volume (24h) $4.28B

, Cardano’s ADA

ADA$0.9842

Cardano

Change (24h)

5.66%

Market Cap $34.62B

Volume (24h) $3.71B

, Algorand’s ALGO

ALGO$0.2486

Algorand

Change (24h)

5.31%

Market Cap $2.07B

Volume (24h) $112.29M

, Cosmos’ ATOM

ATOM$4.24

Cosmos

Change (24h)

2.03%

Market Cap $1.65B

Volume (24h) $104.11M

, Filecoin

FIL$3.07

Filecoin

Change (24h)

2.76%

Market Cap $1.90B

Volume (24h) $140.75M

, Polygon’s MATIC

POL$0.2504

Polygon

Change (24h)

2.23%

Market Cap ⸺

Volume (24h) $12.59M

and five others.

Brazil lifts freeze on Starlink- and X-related bank accounts after $3 million fine payment

On Sept. 13, the Brazilian Supreme Court lifted a freeze on bank accounts tied to Elon Musk’s Starlink and social media platform X after the funds were transferred to the national treasury.

The $18.35 Brazilian reals, worth around $3.3 million US dollars, are linked to a legal dispute involving the social media platform’s failure to comply with court orders.

Brazil’s Supreme Court had ordered X to block accounts accused of spreading misinformation and hate speech, previously classifying the content as threatening democracy.

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On Sept. 12, Brazil’s Attorney General’s Office argued that the suspension of X does not violate free speech rights and that the lawsuits against the X ban lacked legal grounds.

UK government introduces bill to clarify crypto’s legal status

On Sept. 11, the United Kingdom government introduced legislation that enables the assessment of whether Bitcoin

BTC$89,090

Bitcoin

Change (24h)

3.34%

Market Cap $1.76T

Volume (24h) $45.66B

and other cryptocurrencies can be deemed “personal property.”

The government announced that the Property Bill would clarify the legal status of non-fungible tokens (NFTs), cryptocurrencies and carbon credits.

Labour MP and Minister of State Heidi Alexander explained that the new legislation could help “bring clarity to complex property cases.”

The UK government stated that the proposed law would give “legal protection” to owners and companies when “digital holdings are disputed or form part of settlements.”

Coinbase’s “Stand With Crypto” creates NFT legal defense fund

On Sept. 13, the Coinbase-led political advocacy group Stand With Crypto announced its launch of a legal defense fund for NFT projects.

The “Creator Legal Defense Fund” is a $6 million fund backed by venture capital firm a16z and NFT marketplace OpenSea.

According to the Stand With Crypto website, the SEC’s issuance of a Wells notice to OpenSea and other “artists and creators” has raised legal concerns for those building on blockchain technology.

Alongside the action against OpenSea, the SEC also brought legal action against crypto exchanges Coinbase, Kraken and Binance, alleging they violated securities laws.