Crypto exchange Kraken's lawyers argue in their latest court filing that the Securities and Exchange Commission's arguments don't hold weight as both sides are gearing up for a hearing in June.
Kraken's lawyers said in a court document filed on Thursday that the agency has "not identified any investment contracts that were (or could be) traded, brokered, or settled on Kraken."
Kraken also argued that the agency failed to satisfy elements of the Howey Test, a 1946 U.S. Supreme Court case frequently cited by the SEC, to determine if an asset qualifies as an investment contract and, therefore, a security.
In November, the SEC sued Kraken’s parent firms, Payward and Payward Ventures, for allegedly operating an online trading platform. In past court filings, the SEC has said the exchange has "created risk for its customers." Kraken moved to dismiss the lawsuit in February.
A hearing to discuss Kraken's move to dismiss the SEC's lawsuit is set for 2 p.m. ET on June 12.
The SEC has also pushed back against Kraken's assertion that an investment contract requires a written contract, according to an April filing. Kraken's lawyers, meanwhile, said they haven't said there needs to be a written contract.
"The word 'written' appears nowhere in Kraken’s Motion; nor did Kraken otherwise suggest a written contract was required," Kraken's lawyers said in Thursday's court filing.
Kraken's lawyers also applied the "major questions doctrine" in its most recent filing. The doctrine, which has been often cited by crypto firms, says that if an agency wants to decide on an issue that has major national significance, it has to be supported by clear congressional authorization. The SEC has asserted that it is not "assuming new powers."
"To argue that the SEC is assuming new powers in doing so here suggests that new technologies are beyond the scope of traditional securities law. They are not," the SEC said in the April filing. "Congress does not need to enact bespoke laws for each new technology that emerges."
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