The U.S. Securities and Exchange Commission has decided to dismiss its lawsuit against the crypto exchange Kraken, marking a significant victory for the industry.
Significance for Kraken
The lawsuit was filed in November 2023, with the SEC accusing Kraken of mishandling customer funds and operating as an unregistered securities broker. Kraken chose to fight the charges, and a federal judge initially ruled that the SEC had a plausible case. However, the SEC has now decided to drop the charges after reaching an agreement with Kraken, pending approval from the SEC's Commissioners.
A Turning Point for Crypto in the U.S.
Kraken described the SEC’s decision as more than just a legal victory, calling it a turning point for the future of crypto regulation in the U.S. The decision ends a politically motivated campaign, according to Kraken, and removes obstacles to innovation and investment.
SEC’s Changing Approach to Crypto Enforcement
Kraken's win comes amid a shift from aggressive enforcement tactics under new SEC leadership, moving away from the stance during former SEC Chair Gary Gensler's tenure. The new leadership is committed to developing clear and fair regulations for the cryptocurrency industry, rather than relying on 'regulation by enforcement.'
This development may signal a new phase in crypto regulation, providing companies with greater support in their efforts toward innovation and compliance.
