In a recent update, cryptocurrency exchange Kraken and the US Securities and Exchange Commission (SEC) have reached a joint stipulation and proposed order. This development comes as Kraken prepares to file an objection to a recent order issued in favor of the SEC.
As per a court filing dated December 23, the plaintiff SEC and defendants Payward Inc and Payward Ventures (collectively known as Kraken) have submitted a stipulation. The Parties had previously filed a joint statement on November 19 regarding a discovery dispute related to the SEC’s objections to Kraken’s requests for three categories of documents. These documents include information on Bitcoin and Ether, the SEC’s public statements and testimony regarding digital assets, and the SEC’s internal trading policies on digital assets.
Although the court had referred discovery disputes to Magistrate Judge Robert M. Illman, who denied Kraken’s request to compel the production of the discovery, Kraken maintains that the requested documents are pertinent to the case.
While the deadline to file objections to the order was initially set for December 30, Kraken plans to resubmit narrowed requests for production in compliance with the order. The SEC and Kraken have mutually agreed to extend the deadline for filing objections to March 31, 2025, to allow for further discussions on a possible extension.
Kraken is being represented by prominent attorney Matthew C. Solomon, known for his successful defense in various high-profile cases, including Ripple CEO Brad Garlinghouse’s case. One of Kraken’s requests was to compel 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 platform. However, the magistrate judge deemed Kraken’s argument as “unpersuasive.”
The crypto industry, including Kraken, has emphasized the relevance of former SEC official William Hinman’s speech in determining the status of Bitcoin and Ether under federal securities laws. Kraken has also cited the fair notice defense and the major questions doctrine in the ongoing lawsuit.
In a related development, Ripple Chief Legal Officer Stuart Alderoty recently called for an end to the Ripple vs. SEC lawsuit. He urged the incoming administration to address the issues stemming from Hinman’s actions and work towards restoring trust in the agency.
Overall, the collaboration between Kraken and the SEC, along with the ongoing legal proceedings, highlights the complexities surrounding the regulation of digital assets and the importance of transparency in the cryptocurrency market. Stay tuned for further updates on this evolving story.