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The digital currency ecosystem was rattled again on Monday as the United States Securities and Exchange Commission (SEC) filed another lawsuit against Kraken exchange, accusing the firm of operating as a securities exchange without first registering its operations. One notable high point of the lawsuit is that the regulator labeled some cryptocurrencies but politely omitted XRP, a move that has many undertones for the asset.
In this SEC's lawsuit, the Gary Gensler-led agency labeled Cardano (ADA), Axie Infinity (AXS), Algorand (ALGO), Cosmos (ATOM), Chiliz (CHZ), Polygon (MATIC) and Solana (SOL), among other altcoins trading on the Kraken exchange, as securities. Though XRP was relisted by Kraken back in July, the SEC omitted the coin, lending credence to the clear status of the asset as a nonsecurity.
XRP fought alone to get to where it is today. Back in December 2020, the SEC launched one of the crypto industry's high-profile cases against Ripple Labs Inc, alleging the blockchain payments firm facilitated the sales of XRP to both retail and institutional investors as an unregistered security.
The vehement fight put up by Ripple Labs has helped vindicate XRP, and this is the first case since the SEC's interlocutory appeal was denied that the regulator omitted XRP, showing the victory is now integrated into the laws the SEC banks on to regulate the market.
Kraken plans to fight back
This lawsuit is the second time Kraken exchange will be sued by the markets regulator this year, making the exchange the commission's favorite target. The previous lawsuit hinged on allegations regarding Kraken's staking product, which the SEC said was a securities offering.
The firm settled the case with $30 million and agreed to stop the product, and with the SEC at it again, founder and CEO Jesse Powell has expressed his readiness to fight the SEC, a move that implies another crypto legal brawl is here to keep tabs on.