SEC vs. Kraken lawsuit sparks controversy! Officials from multiple states jointly accuse the SEC of seriously overstepping its authority

The state attorney general said the SEC's lawsuit could cause harm to consumers and accused the SEC of expanding the definition of "investment contracts" to automatically classify cryptocurrencies as securities. Reported by 120btC.coM station.

States jointly accuse the SEC of exceeding its authority in prosecuting Kraken

According to CoinDesk, officials from multiple U.S. states jointly submitted court friendly opinions regarding the lawsuit between the SEC and Kraken. Industry lobbyists and state law enforcement officials have expressed their views.

• Texas

• Montana

• Arkansas

• Iowa

• Ohio

• South Dakota

• Mississippi State

• Nebraska

Crypto industry lobbyists include organizations such as the Digital Chamber of Commerce, the Blockchain Association, and the DeFi Education Fund.

The state attorney general said that the SEC’s lawsuit may even harm consumers, and argued that the SEC is expanding the definition of “investment contract” to automatically classify cryptocurrencies among securities.

The SEC is stripping states of jurisdiction

The opinion emphasizes that states are not submitting documents to support Kraken, but to oppose the SEC.

The opinion stated: States strongly oppose the SEC’s attempt to classify crypto-assets as securities. The SEC’s exercise of unauthorized authority will put consumers at risk because it may preempt similar cases in the future under federal law. However, federal regulations may not be more applicable to the specific risks of non-securities products than state laws, which are more protective of consumer rights than federal securities laws.

The opinion notes that past state cases have helped clarify the definition of investment contracts.

In addition to accusing Kraken of listing 11 unregistered securities, the SEC also accused Kraken of mixing user and company funds.

Kraken filed a motion to dismiss last week, claiming that the SEC failed to reasonably accuse its arguments and had exceeded its authority. This is similar to the counterarguments previously raised by Coinbase and Binance.

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