In a significant development in the cryptocurrency world, Kraken, a prominent crypto exchange, and the U.S. Securities and Exchange Commission (SEC) have filed a joint stipulation along with a proposed order. This action follows Kraken’s intention to challenge a recent court order that favored the SEC. According to a court document dated December 23, the SEC, along with defendants Payward Inc and Payward Ventures (collectively known as Kraken), have submitted an official stipulation to the court.
Parties File Joint Statement
On November 19, 2024, both parties submitted a joint statement in response to a discovery dispute related to the SEC’s objections to Kraken’s requests for specific documents. These documents pertain to critical issues, including Bitcoin and Ether, the SEC’s public pronouncements and testimonies regarding digital assets, and the SEC’s internal trading policies concerning these assets. Despite the court’s decision in November to hand over discovery disputes and all related matters to Magistrate Judge Robert M. Illman, Kraken’s request to compel the production of these documents was denied. Nevertheless, Kraken maintains that these documents are crucial to their case.
SEC, Kraken Agree to Stay Deadline
Originally, the deadline for filing objections to the court’s order was set for December 30. However, Kraken plans to submit revised requests for document production in compliance with the recent order. Importantly, both the SEC and Kraken have mutually agreed to extend the deadline for filing objections to March 31, 2025, allowing more time to negotiate a potential further extension.
Kraken is represented by renowned attorney Matthew C. Solomon, who has been involved in numerous high-profile cases. His notable achievements include successfully defending Ripple CEO Brad Garlinghouse, resulting in the dismissal of claims with prejudice and the successful defense of other claims through summary judgment.
Kraken had previously sought a court order compelling the SEC to produce documents explaining why Bitcoin and Ether were excluded from the SEC’s complaint, despite being traded similarly to other tokens on the Kraken platform. However, the magistrate judge deemed Kraken’s argument unconvincing.
Notably, Kraken and the wider cryptocurrency industry have highlighted former SEC official William Hinman’s speech as a critical factor in determining the regulatory status of Bitcoin and Ether under federal securities laws. Kraken has also invoked the fair notice defense and the major questions doctrine in their legal battle.
Ripple CLO Calls for End to the Ripple vs SEC Lawsuit
In a related legal saga, Ripple’s Chief Legal Officer, Stuart Alderoty, has recently called for the conclusion of the ongoing Ripple vs. SEC lawsuit. He has urged the incoming administration to address what he refers to as the “lingering stain” of former SEC official Hinman on the agency. Alderoty emphasized the need to restore trust and repair the damage caused by the lawsuit.
The developments in these cases highlight the ongoing complexities and challenges faced by the cryptocurrency industry as it navigates the evolving regulatory landscape. As legal battles continue, the outcomes could have significant implications for the future of digital assets and their regulation.
