Kraken and SEC File Joint Stipulation in Ongoing Discovery Dispute

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In the latest development, crypto exchange Kraken and the US SEC have filed a joint stipulation and proposed order. The action comes as Kraken plans to file an objection to a recent order issued in favor of the SEC. 

According to a court filing dated December 23, the plaintiff US SEC and defendants Payward Inc and Payward Ventures (together, crypto exchange Kraken) have submitted a stipulation. 

Parties File Joint Statement

On November 19, 2024, the Parties filed a joint statement regarding a discovery dispute concerning 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, who subsequently denied Kraken’s request to compel the production of the discovery. Despite this, Kraken believes that the documents are relevant to the case.

SEC, Kraken Agree To Stay Deadline

While the deadline to file objections to the order is December 30, Kraken intends to resubmit narrowed requests for production in line with the order. Notably, 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.

Kraken is represented by prominent lawyer Matthew C. Solomon, who 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 requested an order to compel the SEC to produce documents explaining why Bitcoin and Ether were not included in the SEC’s complaint, despite being traded similarly to other tokens on the platform. However, the magistrate judge found Kraken’s argument “unpersuasive.”

Notably, Kraken and the broader crypto industry have asserted that former SEC official William Hinman’s speech is relevant to determining the status of Bitcoin and Ether under federal securities laws. Kraken has also argued for the fair notice defense and the major questions doctrine in the lawsuit.

Ripple CLO Calls For End To The Ripple vs SEC Lawsuit

Recently, Ripple CLO Stuart Alderoty also called for an end to the Ripple vs SEC lawsuit. He urged the incoming Trump administration to “cleanse the lingering stain of Hinman from the agency.” “There’s much more to do to repair the damage, but let’s start by restoring trust,” he noted.