Kraken, Ripple Chief Legal Officer: Court rules that tokens traded on Kraken are not securities

Kraken Chief Legal Officer Marco Santori recently commented on the ruling of the Northern District of California Federal Court. It is reported that Kraken sought to dismiss the US SEC's lawsuit, which claimed that certain crypto tokens traded on the Kraken platform were considered securities, but the court rejected Kraken's request. However, Santori said: "As a legal matter, the Northern District of California Federal Court ruled that none of the tokens traded on Kraken are securities. This is a major victory for Kraken, for the principle of transparency and for crypto users everywhere. This also confirms Kraken's long-standing position that the platform does not list securities." In addition, Santori pointed out that the court criticized the SEC's definition of "crypto asset securities" as "not clear at best and confusing at worst", and also questioned the SEC's description of Kraken's position on requiring a "written contract" for securities classification. Santori added: “Fundamentally, the court in Kraken made the same distinction as in Ripple: tokens are not securities, but agreements around tokens may be securities.” He further emphasized the broader impact on the crypto industry, warning that the SEC’s enforcement-based regulatory approach could lead to “extensive, expensive, and time-consuming discovery” for a large number of transactions. He urged Congress to establish a comprehensive market structure framework to ensure regulatory clarity and promote the development of blockchain technology. Commenting on Santori’s remarks, Ripple Chief Legal Officer Stuart Alderoty said: “Another court, this time in the Kraken case, confirmed that there is no such thing as a ‘crypto-asset security.’ This is bad news for the SEC, because its entire enforcement regulatory strategy is based on this failed premise.” (Bitcoin.com)