SEC to drop lawsuit against Kraken without penalties

Key Takeaways

The SEC agreed to dismiss its lawsuit against Kraken without penalties or changes to business operations.
Kraken emphasized the need for a stable regulatory framework to encourage responsible growth in the digital asset economy.

Kraken said Monday the US SEC had agreed to dismiss its lawsuit against the crypto exchange with prejudice—meaning the case is permanently closed, with no penalties, no required business changes, and no admission of wrongdoing by Kraken.

Kraken faced the SEC’s lawsuit in November 2023, with the regulator alleging the exchange had been operating as an unregistered securities exchange for years. The SEC also claimed Kraken made hundreds of millions by trading unregistered crypto securities.

In today’s statement, Kraken said that the enforcement action was never about protecting investors but rather a politically motivated campaign that misrepresented its business model. The company believes the case was part of an outdated “regulation-by-enforcement” approach that hurt US crypto innovation.

“The SEC’s decision to dismiss its lawsuit against us (and many others) is more than just a legal victory — it’s a turning point for the future of crypto in the U.S. It ends a wasteful, politically motivated campaign, lifts uncertainty that stifled innovation and investment, and clears the path toward a stable, forward-thinking regulatory regime,” Kraken stated.

The crypto exchange expressed approval of “new leadership both at the White House and the Commission” and their role in the dismissal. Kraken said it would continue working with policymakers and regulators to establish protective guidelines while fostering technological advancement.

“A stable, predictable regulatory framework will encourage responsible growth, attract investment and ensure the US remains competitive in the global digital asset economy,” Kraken noted.

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