The attorneys general of the states of Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota and Texas sent an expert opinion to the court, supporting the Kraken crypto exchange in legal battles with the US SEC.

The Montana Attorney General's Office, with the support of seven other states, submitted an independent expert opinion to the court regarding the case of the American crypto exchange Kraken, brought by the US Securities and Exchange Commission (SEC). The regulator accused the platform of trading unregistered securities and failing to register as a broker-dealer.

Montana Attorney General Austin Knudsen argues that cryptoassets should not automatically be considered securities and fall under the definition of an “investment contract.” The SEC is trying to “seize” power over cryptocurrencies by exceeding its authority and arbitrarily extending it to assets outside its supervision, Knudsen noted.

The Prosecutor General emphasized that the initial definition of an “investment contract” was based on the so-called “blue sky” laws. These laws regulate the issuance and trading of securities, so they are intended to protect financial investors, not ordinary users purchasing various assets. According to Knudsen, sales of crypto assets on the secondary market do not meet the Howey test, which is used to determine securities.

The Attorney General's opinion states that on platforms like Kraken, investment contracts are not concluded between buyers and sellers, since there is no expectation of profit obtained through the efforts of others as a result of cryptocurrency transactions. Otherwise, ordinary baseball card collectors will become investors in securities, and third-party sellers of these cards will become stock exchanges.

Let us recall that recently the Chamber of Digital Commerce also sharply criticized the SEC’s approach to regulating the crypto industry, calling cryptocurrencies just lines of computer code.

Source - Bits.Media

Attorneys General of Eight US States: “Cryptocurrencies are not securities”