#Kraken #SEC #CryptoRegulation #DigitalAssets #Blockchain #ConsumerProtection #LegalBattle #Cryptocurrency
A coalition of US state attorneys general from states including Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota, and Texas, as well as several pro-cryptocurrency groups, have expressed their opposition to the Securities and Exchange Commission’s (SEC) legal stance against Kraken, a prominent cryptocurrency exchange. This collective disapproval was formally communicated through amicus briefs filed on February 29. Notably, the objection from these states and entities doesn’t take sides with Kraken per se but rather challenges the SEC’s approach, particularly criticizing its ‘ecosystem’ theory as not only unlawful but also potentially harmful to citizens by overstepping its regulatory bounds.
The filings emphasized concerns over the SEC’s potential overreach, which might encroach upon consumer protection and other state-mandated laws. These states claim to have already put in place legal frameworks that regulate digital assets similarly to how money transmitters are regulated, necessitating these entities to adhere to stringent security measures, minimum net worth requirements, and regular regulatory inspections. Figures from the crypto industry, including Coinbase’s Chief legal officer, Paul Grewal, and pro-cryptocurrency lawyer Bill Morgan, echoed similar sentiments. They highlighted these legal actions as a firm stand against what they view as the SEC’s undue expansion of its regulatory powers into the cryptocurrency domain without clear legislative backing, thereby creating significant confusion and potential legal uncertainties within the rapidly evolving blockchain and cryptocurrency sectors.
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