Ripple and Kraken Legal Chiefs Declare Victory Over SEC's Crypto Asset Claims

The chief legal officers at Kraken and Ripple have shared their insights following a recent ruling from the Federal Court for the Northern District of California regarding the SEC’s lawsuit against Kraken.

‘Bad News for the SEC,’ Says Ripple’s Legal Chief

Marco Santori, Kraken’s chief legal officer, commented on the court's decision, which denied the SEC's claim that certain crypto tokens traded on Kraken are securities. He stated, “Today, the Federal Court ruled that none of the tokens trading on Kraken are securities,” marking a significant victory for Kraken and the broader crypto community. This ruling emphasizes Kraken's long-standing position that it does not list securities.

Santori highlighted the court's criticism of the SEC's definition of “crypto asset security”, labeling it as “unclear at best and confusing at worst.” Furthermore, he pointed out that the court aligned with the previous ruling in the Ripple case, asserting that while a token itself isn’t a security, agreements surrounding it could be classified as such.

Implications for the Crypto Industry

Santori forewarned that the SEC's enforcement-focused regulatory approach could result in “extensive, expensive, and time-consuming discovery” for many transactions. He called on Congress to create a comprehensive market structure framework to ensure regulatory clarity and foster the growth of blockchain technology. He concluded, “Today’s ruling confirms what we’ve been saying all along: the SEC cannot credibly regulate crypto by enforcement.”

Stuart Alderoty, Ripple’s chief legal officer, echoed Santori’s sentiments, stating on X: “Another court confirms there’s no such thing as a ‘crypto asset security.’ Bad news for the SEC, whose entire regulation-by-enforcement strategy hinges on that failed premise.”

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