The Chamber of Digital Trade filed an amicus curiae brief defending crypto exchange Kraken in the lawsuit filed by the US SEC, according to court documents dated February 27.
The House explained that the purpose of the amicus brief is to end the SEC’s attempt to regulate the digital asset industry through enforcement without legislative authority.
The CDC wrote in a statement about X:
“Enforcement is NOT enough. While Congress works on solutions, [the SEC’s] An aggressive approach inhibits innovation. Fair regulation can provide opportunities for economic growth, job creation and financial inclusion.”
The trade body claimed that the SEC is wrong in stating that securities laws can be expanded to regulate all transactions involving digital assets. It called this “legally incorrect” and emphasized that digital assets are “not inherently investment contracts.”
The group also warned of the broader effects of enforcement. It called the SEC’s stance “a threat to the adoption and advancement of blockchain technology.” The Chamber also argued that this could have a significant impact on the trillions of dollars worth of digital assets space and, by extension, on the US economy.
The filing specifically cites other high-profile cases in which the SEC did not achieve an entirely favorable outcome, including those against Ripple and Terraform Labs.
SEC sued Kraken last November
The SEC initially charged Kraken in November 2023 on charges of operating an unregistered securities exchange, broker, dealer and clearing agency. The regulator also alleged that the exchange had, among other things, commingled customer and company funds.
Kraken and its representatives have publicly denied the SEC’s allegations and are fighting the case in court. Most recently, Kraken filed a motion to dismiss the case on February 23, stressing that the allegations are mainly related to failure to register and not fraud.
The Chamber of Digital Commerce said in its latest filing that it supports Kraken’s motion to dismiss the lawsuit.
The case is separate from a previous case involving Kraken’s strike services. Kraken settled with the SEC for $30 million and shut down those services in the US in February 2023.
Two other crypto exchanges – Coinbase and Binance – are involved in similar SEC cases alleging unregistered exchange transactions. Those cases started in June 2023.