Mon. Dec 4th, 2023
    New SEC Lawsuit Against Kraken Reveals Omission of XRP: Legal Clarity for the Crypto Asset?

    The United States Securities and Exchange Commission (SEC) has recently filed a lawsuit against Kraken, accusing the cryptocurrency exchange of operating as an unregistered national securities exchange, broker, and clearing house. The SEC alleges that Kraken has been offering crypto assets considered securities to U.S. customers without proper registration since 2013. However, what stands out in this lawsuit is the absence of XRP among the alleged securities.

    Earlier this year, the SEC made headlines when it sued Ripple and its executives, claiming that XRP was an unregistered security. However, after a two-year legal battle, Judge Analisa Torres ruled that XRP itself is not a security. This ruling has given hope to the crypto community and raised questions about the SEC’s approach to regulating the industry.

    Interestingly, Kraken suspended support for XRP shortly after the SEC charged Ripple in December 2020. However, following the recent ruling, the exchange resumed support for the asset. Yet, in the SEC’s lawsuit against Kraken, XRP is notably absent among the alleged securities.

    This pattern of omitting XRP from lawsuits has also been observed in cases against other exchanges like Binance and Coinbase. This trend has solidified a common belief that XRP is the only crypto asset with legal clarity in the United States.

    While the SEC has not included Bitcoin (BTC) and Ethereum (ETH) in these lawsuits, the status of ETH remains contested. SEC Chairperson Gary Gensler has declined to classify Ethereum as either a security or a commodity. BTC, on the other hand, has not undergone a trial to determine its status.

    In response to the allegations, Kraken has stated that it disagrees with the SEC’s claims and plans to vigorously defend its position. Other exchanges, such as Coinbase and Binance, have also taken a similar stance when faced with regulatory challenges.

    It remains to be seen how this lawsuit will unfold and whether it will provide further clarity on the legal status of XRP. As the crypto industry grapples with increasing regulatory scrutiny, investors are advised to conduct thorough research and make informed decisions.