US Senator On Kraken Lawsuit: “SEC Unnecessarily Harming Customers”

US Senator Cynthia Lummis, a pro-crypto lawmaker from Wyoming, lashed out at the US Securities and Exchange Commission (SEC) over the Kraken lawsuit that charged the crypto exchange of operating as an unregistered securities exchange, broker, dealer, and clearing agency. The lawsuit comes after a long drawn investigation, following reports on February 9, 2023 about the exchange being under the SEC’s watch for potential misdoings.

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Ruling By Enforcement

Reacting to the Kraken lawsuit news, Senator Lummis said the SEC cannot continue ruling by enforcement. The enforcement comes amid repeated attempts by crypto asset companies to get guidance from the SEC, she said. The attempts only attracted enforcement actions, causing unnecessary harm to consumers. The Senator called for the passing of a regulatory framework by the Congress to provide clear rules to the SEC. The rules should define which assets qualify as securities and which ones as commodities, she added in a statement.

Earlier in 2023, Senator Lummis along with Kirsten Gillibrand presented the Responsible Financial Innovation Act, which is aimed at categorizing a majority of cryptocurrency assets as commodities.

Lengthy Probe On Kraken

Earlier in February 2023, CoinGape reported that the US SEC began investigating Kraken for possible violations of offering unregistered securities in the United States. The latest complaint came on the same lines, stating that the exchange allegedly made hundreds of millions of dollars in crypto trading unlawfully. Also, while operating as an exchange, broker, dealer, and clearing agency, Kraken continued without having registered with the SEC, the agency said in the complaint.

On the other side, Kraken has a history of settling with the US SEC. In February 2023, the exchange had officially agreed to closing down its crypto staking service and pay $30 million in penalties, in what was a crackdown on crypto staking for retail investors.

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