Kraken and Ripple's Chief Legal Officers: Court Rules That Tokens Traded on Kraken Are Not Securities
ChainCatcher news, according to Bitcoin.com, Kraken's Chief Legal Officer Marco Santori recently commented on the ruling of the Northern District of California Federal Court. It is reported that Kraken sought to dismiss the lawsuit from the U.S. SEC, which claims that certain cryptocurrencies traded on the Kraken platform are considered securities; however, the court rejected Kraken's request.
However, Santori stated: "As a legal matter, the Northern District of California Federal Court ruled that the tokens traded on Kraken are not securities, which is a significant victory for Kraken and for the principle of transparency and crypto users everywhere. This also confirms Kraken's long-standing position that the platform does not list securities."
Additionally, Santori pointed out that the court criticized the SEC's definition of "crypto asset securities" as "not clear enough, to put it nicely, and confusing, to put it harshly," while also questioning the SEC's description of Kraken's request for a "written contract" for securities classification.
Santori added: "Fundamentally, the court in the Kraken case made the same distinction as in the Ripple case: tokens are not securities, but the agreements made around the tokens may be securities."
He further emphasized the broader implications for the crypto industry, warning that the SEC's enforcement-based regulatory approach could lead to "broad, expensive, and time-consuming discovery" for a large number of transactions. He urged Congress to establish a comprehensive market structure framework to ensure regulatory clarity and promote the development of blockchain technology.
Ripple's Chief Legal Officer Stuart Alderoty, commenting on Santori's remarks, stated: "Another court, this time in the Kraken case, confirms that there is no such thing as 'crypto asset securities.' This is bad news for the SEC, as its entire enforcement regulatory strategy is built on this failed premise."
