The U.S. Securities and Exchange Commission has filed a motion in the Northern District Court of California, seeking to dismiss key defenses presented by Kraken in an ongoing legal dispute between the pair.

The regulatory watchdog contends Kraken had received prior fair notice when, last year, it charged the exchange with violating securities laws by offering crypto assets as “investment contracts,” according to a motion filed on Tuesday.

The timing of the SEC’s motion—filed on Election Day—prompted criticism from Kraken’s legal team, who view it as a tactic to avoid “discovery into the SEC’s defective and inconsistent policies.”

The agency seeks to eliminate Kraken’s claims of the major questions doctrine and due process violations—defenses Kraken argues are critical in protecting its operations from regulatory overreach. 

Kraken’s insistence on lacking regulatory clarity is “without merit,” and the exchange was adequately warned about the potential classification of its crypto offerings as securities, the SEC contends.

The motion builds on the SEC’s argument that federal securities laws apply to digital assets offered as investments, a stance that has fueled multiple regulatory clashes with crypto firms.

“The Court should dismiss these defenses to help maintain the proper scope of discovery, narrow summary judgment, save judicial and party resources, and prevent Kraken from trying to re-litigate the same issues repeatedly at every possible stage of this case,” states the filing.

Kraken’s attorney, Michael O’Connor, didn’t hold back in criticizing both the timing and intent of the SEC’s move, calling it an “Election Day gambit,” in a Wednesday statement on X. 

O’Connor referenced the Ripple case, where a similar SEC motion was dismissed, expressing confidence that Kraken’s defenses would withstand scrutiny.

The motion also arrives on the heels of Kraken’s demand for a jury trial. and its challenge to the SEC’s classification of 11 cryptos—including Solana (SOL), Cardano (ADA), and Polygon (MATIC)—as securities. 

Kraken claimed that its repeated attempts to register with the SEC were “stonewalled” by the agency, alleging that SEC Chair Gary Gensler has inconsistently applied securities laws to the detriment of the crypto industry.

The SEC’s motion arrives amid speculation that Chair Gary Gensler could soon step down. With Donald Trump’s projected election win, analysts suggest Gensler may resign by year-end, following the precedent of SEC chairs leaving office during a change in administration.

Edited by Sebastian Sinclair

Neary 65 million Americans have already cast their votes ahead of next week’s election—and the race between the two candidates is tightening up.

Cryptocurrency has been a significant issue in the presidential race, with former president and Republican nominee Donald Trump pivoting from a skeptic to a self-proclaimed crypto candidate, while current Vice President Kamala Harris—who took over for President Joe Biden as the Democrats’ pick in July—has signaled an intent to break from the anti-crypto policies of the current administration in which she serves.

At Decrypt, we’ve been covering the ins and outs of the role of cryptocurrency in American politics throughout the entire election cycle. But with just three days left until Election Day, here’s a primer on where Trump and Harris stand on crypto, and what you might expect if either secures the win next week.

Donald Trump

Ex-President Donald Trump has been far louder than Harris on the topic of crypto. 

Previously anti-Bitcoin and skeptical of the crypto space, the business and real estate mogul has taken a sharp U-turn on the topic, coming out as an advocate for the industry and picking up ample support and donations along the way.

Fast-forward to 2024 and Trump has released multiple sets of NFT collectibles, called for the Americanization of Bitcoin, and even has backed a decentralized finance (DeFi) project called World Liberty Financial alongside his sons. World Liberty hasn’t gotten off to a great start with prospective investors, though sources tell Decrypt that it plans to issue a stablecoin.

Like some other Republicans, Trump has railed against central bank digital currencies (CBDCs), or digital dollars—effectively government-backed cryptocurrencies that don’t yet exist in the U.S., but frighten the libertarian wing of the GOP and large parts of the digital asset space due to fears of increased government surveillance.

His promise to help Bitcoin mining—a big business formerly dominated by China, but now with a lot of American players—perfectly fits Trump’s fiery protectionist brand. As does his desire to fire crypto bogeyman Gary Gensler, the crypto-targeting U.S. Securities and Exchange Commission chairman.

Top executives in the crypto space have since backed Trump for his apparent passion for the industry, or at least his willingness to publicly engage with an industry that most politicians have avoided.

If elected to a second term, will Trump live up to his promises to protect crypto in the U.S. and advance the industry?

Kamala Harris

Democratic nominee Kamala Harris was initially quiet on the topic, and unlike Trump, certainly hasn’t been seen tossing burgers to Bitcoiners at a BTC-themed New York City bar.

But crypto is a part of the former attorney general’s agenda. 

In October, Harris said she had plans for the space when a part of her “Kamala Harris Will Deliver for Black Men” platform included a commitment for specifically for the African American community. 

A document for the campaign said it was for “supporting a regulatory framework for cryptocurrency and other digital assets so Black men who invest in and own these assets are protected.”

The framing proved controversial, particularly since it was arguably her most specific comments to date about crypto. But a spokesperson later clarified that such plans were intended for all Americans, and wouldn’t be limited by race.

That isn’t the only evidence that the crypto industry will fit into her presidential plans, however. Harris has said that blockchain, AI, and other emerging technologies will be innovated upon in America, and before that told donors at a fundraising event that she would encourage growth for the digital assets space in the country.

Billionaire businessman and crypto enthusiast Mark Cuban previously told Decrypt in July that the Harris campaign reached out to the former Dallas Mavericks owner with questions about digital assets. He later said the Harris camp was “far more open” to the space than the Biden administration—and he’s not the only crypto heavyweight who’s optimistic about Kamala.

Edited by Andrew Hayward

The U.S. Securities and Exchange Commission has filed a last-minute appeal in its ongoing legal sparring with Ripple Labs, seeking to reverse parts of a summary judgment delivered by U.S. District Judge Analisa Torres more than a year ago.

Torres’ July 2023 ruling partially favored Ripple by concluding that the company’s sales of XRP to retail investors on digital asset platforms did not violate U.S. securities laws. 

The court found that these transactions did not meet the legal criteria for an investment contract, dealing a blow to the SEC’s broader efforts to regulate cryptocurrency sales under existing securities laws.

Filing in the U.S. Court of Appeals for the Second Circuit late Thursday, the SEC does not contest the decision that XRP sales to retail investors through exchanges are not securities. Instead, the agency is focusing its challenge on other key aspects of the ruling.

The appeal targets the court’s decision that Ripple’s offers and sales of XRP on digital asset trading platforms, as well as personal sales by Ripple executives Bradley Garlinghouse and Christian Larsen, did not constitute securities violations. 

The agency is also contesting the ruling that Ripple’s distributions of XRP in exchange for non-cash consideration were not in breach of securities laws.

Ripple’s institutional sales of XRP to large investors were previously found to have violated securities laws by the U.S. Southern District Court, which imposed a $125 million civil penalty on the San Francisco-based firm.

The SEC’s appeal, which will be reviewed de novo, will allow the appellate court to reconsider the lower court’s interpretation of securities laws in relation to XRP sales on digital platforms and non-cash transactions. 

De novo means that the appellate court will reconsider these legal issues from scratch without deference to the district court’s interpretations. Ripple’s victory regarding XRP’s retail sales, however, remains intact and is not part of the appeal.

While it was widely anticipated that the SEC would file its notice of appeal on October 2, users have taken to social media to decry what they view as the agency missing a 14-day window for filing its Form C.

A Form C, in the context of appellate court procedures, is used by the appellant—in this case, the SEC—to provide basic information about the appeal and the lower court’s decision.

Filing is mandatory and must be done within 14 days of filing the notice of appeal, according to the form’s own legalese. It’s a date that some have accused the agency of missing, as the document is dated October 16, while the Second Circuit’s docket shows a filing for October 17. 

Decrypt attempted to contact the SEC on that point but has so far received no response. A spokesperson for Ripple did not answer questions relating to the deadline window, instead pointing Decrypt to a social media post by the firm’s chief legal officer, Stuart Alderoty.

“No surprises here — once again, it’s been made clear. The Court’s ruling that “XRP is not a security” is NOT being appealed. That decision stands as the law of the land,” Alderoty tweeted Thursday.

“Stay tuned for Ripple’s Form C to be filed next week,” the executive added.