Kraken crypto exchange has filed a motion to dismiss a US SEC lawsuit against it, arguing that cryptocurrencies should be treated like commodities rather than securities.
The US SEC sued Kraken last November, alleging it did not register as a broker, clearinghouse, or exchange and that the company commingled customer and corporate funds.
The exchange’s motion argues that the SEC did not “plausibly allege” any of the cryptocurrencies listed in its complaint are securities or investment contracts.
In addition, Kraken also argues that the SEC did not meet the requirements set out by the Howey Test, a Supreme Court precedent used as a benchmark for identifying securities.
The US SEC tries to end-run the absence of any purchaser-issuer relationship creating a reasonable expectation of profits based on the efforts of the issuer.
They did this by alleging that the issuers made ongoing public statements advertising their tokens. And improvements of the underlying technology platforms, which Kraken customers allegedly relied on for an expectation of profits based on their efforts.
The SEC has also likened the crypto listed in the SEC’s complaint to bitcoin and ether, two digital assets currently trading derivatives products.
