“Accusations of SEC Overreach in Kraken Lawsuit Raised by Multiple US State Attorneys General”

"Accusations of SEC Overreach in Kraken Lawsuit Raised by Multiple US State Attorneys General"

"Accusations of SEC Overreach in Kraken Lawsuit Raised by Multiple US State Attorneys General"

According to CoinDesk, several state attorneys general in the United States believe that the Securities and Exchange Commission (SEC) exceeded its authority when it filed a lawsuit against the cryptocurrency exchange Kraken. These officials argue that the SEC is attempting to assert jurisdiction that should belong to individual states.

State law enforcement officials from Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota, and Texas, along with industry lobbyists and other participants, submitted a joint amicus brief on Thursday, May 29th, regarding the SEC’s lawsuit against Kraken. The attorneys general claim that the lawsuit brought by the SEC could potentially harm consumers. They believe that the regulatory agency is expanding the definition of “investment contracts” and asserting that cryptocurrencies are not necessarily securities.

This filing echoes some of the arguments put forth by Kraken and other cryptocurrency companies, stating that the positions taken by these states are not in support of Kraken specifically, but rather against the actions of the SEC.

The document states that the cases in these states have helped clarify the definition of investment contracts in the past. Additionally, if the SEC were to prevail, it could preempt consumer protection laws in the states, as well as regulations regarding cryptocurrencies.