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Election Day Maneuver Hits Kraken as SEC Moves to Ax Key Defenses

The SEC just threw a curveball in its long-running spat with Kraken, dropping a motion in California’s Northern District Court that’s geared to yank Kraken’s biggest defenses right out from under it. The Election Day timing raised more than a few brows; Kraken’s legal crew called it a blatant attempt to skirt “discovery,” blocking Kraken’s chance to dig into the SEC’s chaotic, “yo-yo policies” on crypto.

But here’s the kicker: the SEC says Kraken had enough heads-up last year when it came down hard on them for pushing crypto assets as “investment contracts.” This case ain’t Kraken’s first SEC rodeo, but with the watchdog now targeting major defenses like the “big questions” doctrine and Kraken’s cry of due-process violations, things are getting gnarly.

SEC Calls for Kraken to Get Over the “Clarity” Cry, Points to Ripple Ruling

The SEC’s move is all about quashing Kraken’s claims of regulatory murkiness. The agency’s attorneys say federal securities laws cover a ton of digital assets Kraken pitched as investments. But Kraken’s not rolling over. Legal eagle Michael O’Connor, who reps Kraken, went on X to slam the move as an “Election Day gambit” and pointed out a similar attempt backfired in the Ripple case. Kraken, no stranger to scrapes with the SEC, is banking on its defenses holding up here.

Kraken Pushes Jury Trial, Accuses SEC of Stonewalling

Kraken isn’t playing defense alone, though. The exchange recently called for a jury trial and challenged the SEC’s stamp on 11 cryptos, including Solana (SOL), Cardano (ADA), and Polygon (MATIC), as securities. Kraken’s claim? The SEC’s been slamming the door every time Kraken tried to register, tossing them into regulatory purgatory. Kraken even says SEC boss Gary Gensler’s regs are all over the map, making it impossible to tell which rules crypto players are actually supposed to follow.

Rumors Swirl Around Gensler’s Future Amid Trump Win, SEC Moves

All this legal rumbling drops as rumors swirl about Gensler’s possible exit, especially with Trump back in the mix. The word is, if Trump’s win leads to a regulatory overhaul, Gensler might be out by year’s end. Market watchers are already speculating on whether a changing of the guard at the SEC could finally ease the pressure on crypto and toss some much-needed clarity back into the mix.