Nikolas Sargeant
On March 3, Kraken, a major global cryptocurrency exchange, announced that the US Securities and Exchange Commission (SEC) has dropped its lawsuit against the company, marking a significant victory for the platform. The SEC had initially filed the lawsuit in November 2023, alleging that Kraken had been acting as a broker, dealer, exchange, and clearing agency without proper registration. With the lawsuit now dismissed with prejudice, Kraken emphasized that there were no penalties or changes to its business. The move is seen as an important development in a series of dropped SEC cases that may signal a shift in the regulatory landscape for the crypto industry.
Kraken’s CEO celebrated the dismissal, calling it an end to what they described as a “wasteful, politically motivated campaign” by the SEC. The exchange has long criticized the SEC’s approach, claiming that the lawsuits and investigations were detrimental to the growth of the crypto industry. In recent months, the SEC has dropped or ended several investigations and lawsuits against other major crypto firms, such as Coinbase, Uniswap, and Gemini. These actions are increasingly seen as part of a broader shift away from the SEC's "regulation by enforcement" strategy under its previous leadership.
In a broader context, Kraken has been actively expanding its global reach, particularly in emerging markets. The exchange has strategically moved to re-enter the Indian cryptocurrency market, following regulatory uncertainty in the region last year. This return to India marks a pivotal shift in Kraken's international strategy. Additionally, Kraken has made significant strides in Europe, obtaining a MiFID license to offer derivatives products in the region. These moves signal Kraken's commitment to expanding its services and regulatory compliance in diverse markets.
The dismissal of Kraken's case coincides with growing regulatory clarity in the US. The recent changes in SEC leadership, along with the dismissal of other lawsuits, point toward a more measured approach to crypto regulation. The SEC has recently dropped cases against Yuga Labs, Coinbase and against Gemini, to name a few.
