On Monday, crypto exchange Kraken announced that the U.S. Securities and Exchange Commission (SEC) had decided to drop its lawsuit against the company.
The lawsuit is being dismissed with prejudice, indicating that a future SEC administration will not be able to refile the lawsuit against the company — even if political winds change.
Moreover, the company did not admit any wrong, or modify how it runs its business as a condition of the dismissal, Kraken said.
The move follows similar dismissals of investigations against other high-profile digital asset firms, including Coinbase and NFT (non-fungible token) marketplace OpenSea.
The string of dismissals has been widely trumpeted by the digital assets industry, which for years has argued that the Biden administration under previous SEC chair Gary Gensler had pursued a campaign of “regulation by enforcement” against the nascent industry.
“The recent actions by the SEC reinforce the sentiment that regulation by enforcement is out,” Cathy Yoon, General Counsel at Wormhole Foundation, told TheStreet Crypto.
“However, nothing from these dismissals should indicate that there is automatic clarity on the digital assets listed on the exchanges/marketplaces themselves,” Yoon said. “The operating premise here is that a general overarching characterization that these exchanges or marketplaces are unregistered securities exchanges or dealers is wrong and that more clarity is needed on the asset level to make such determinations.”
Kraken said that the end of the SEC's era of litigation against crypto firms marked a "win for fairness."
"This case was never about protecting investors," Kraken said. "It undermined a nascent industry that repeatedly urged clear rules of the road."
"Prior leadership at the SEC and throughout the government took a regulation-by-enforcement approach that stifled progress and disadvantaged the U.S. against other countries who fostered innovation through fair and transparent digital asset regulatory regimes," Kraken added.
"We appreciate the new leadership both at the White House and the Commission that led to this change," the company said.