Crypto exchange Kraken is pushing for a jury trial in its legal battle against the U.S. Securities and Exchange Commission (SEC), according to a court filing submitted on Thursday. The exchange is facing allegations from the SEC of violating federal securities laws by failing to register as a broker, clearinghouse, or exchange.
The lawsuit, filed in the Northern District of California in November, is part of a broader regulatory crackdown on the cryptocurrency industry. Similar lawsuits have been brought against major crypto platforms Binance and Coinbase, which also face accusations of violating securities laws.
The SEC’s complaint against Kraken lists 11 tokens, including ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL, which the agency claims are unregistered securities. The SEC is seeking a permanent injunction to stop Kraken from continuing alleged violations, along with disgorgement of “ill-gotten gains” and civil penalties.
In its latest court filing, Kraken has denied all allegations of illegal conduct, presenting 18 defense arguments. The exchange’s legal position centers on its interpretation of the Securities Act and Exchange Act, arguing that these laws do not apply to digital assets. Kraken maintains that it has never registered with the SEC because it was not legally required to, insisting that it does not function as a broker, clearing agent, or securities exchange under existing regulations.
Kraken also accused the SEC of overstepping its regulatory authority, claiming that the agency has no legal jurisdiction over the platform. According to Kraken, the SEC has failed to demonstrate that the digital assets it lists qualify as “investment contracts,” a classification necessary for them to fall under securities laws. The exchange argued that digital assets lack the characteristics of traditional financial securities, such as stocks or bonds.
Moreover, Kraken alleges that the SEC acted without due process and failed to provide fair notice of regulatory violations, accusing the regulator of infringing on its First Amendment rights.
Despite admitting to offering over 220 crypto assets globally and providing services such as margin trading, over-the-counter trading, and instant buy features, Kraken rejected the claim that these services make its platform a securities exchange or broker-dealer.
The court’s decision to proceed with a trial marks a critical moment in the ongoing regulatory battle between U.S. authorities and the cryptocurrency sector. Both Binance and Coinbase have faced similar rulings, with the SEC’s enforcement actions shaping the future of how digital asset exchanges operate within the U.S. legal framework.
