Kraken and US SEC File Joint Proposed Order, What’s Happening?

Crypto exchange Kraken and the U.S. Securities and Exchange Commission (SEC) have filed a joint stipulation and proposed order. The move comes as the leading crypto exchange plans to file an objection to a recent order in favor of the securities regulator.

Decoding US SEC and Kraken’s New Proposed Order

Plaintiff U.S. Securities and Exchange Commission (SEC) and defendants Payward Inc and Payward Ventures (together crypto exchange Kraken) have submitted a stipulation, as per a court filing late December 23.

The exchange said parties filed a joint statement regarding a discovery dispute. Notably, it concerns the SEC’s objections to Kraken’s requests for three categories of documents concerning Bitcoin and Ether, the SEC’s public statements and testimony regarding digital assets, and the SEC’s internal trading policies on digital assets.

However, in November, the court referred discovery disputes and all further discovery in this case to Magistrate Judge Robert M. Illman. Then, Magistrate Judge Illman denied Kraken exchange’s request to compel the production of the discovery. But, the leading crypto exchange believes the documents are relevant in the case.

Under the Federal Rule of Civil Procedure 72(a), the deadline to file objections to the order is December 30, but the crypto exchange intends to resubmit narrowed requests for production in line with the order.

“Kraken intends to serve narrowed requests for production in light of the Order and the Parties intend to meet and confer regarding those narrowed requests.”

Overall, the US SEC and Kraken have agreed to stay the deadline to file objections to the order until March 31, 2025 to discuss a further extension.

Lawyer Who Defended Ripple CEO Seeks Win for Exchange

Matthew C. Solomon, partner at law firm Clearly Gottlieb, filed an attestation to defend Kraken as the arguments for documents were crucial. He is known for many high-profile cases including successfully defending Ripple CEO Brad Garlinghouse in obtaining the dismissal with prejudice and successful defense of all other claims on summary judgment.

Kraken’s requested an order to compel the SEC to produce documents on why Bitcoin and Ether were not included in the SEC’s complaint despite being traded similarly to 11 crypto tokens on the platform. Even so, the magistrate judge finds the critical argument “unpersuasive“.

As CoinGape reported, the exchange and the crypto industry contended that former SEC official William Hinman’s speech is relevant to the status of Bitcoin and Ether under federal securities laws. Also, Kraken has argued for fair notice defense and the major questions doctrine in the SEC lawsuit.

Notably, Ripple CLO Stuart Alderoty has also urged to remove Hinman’s influence from the SEC for restoring trust in the agency again and ending Ripple vs SEC lawsuit.