The ongoing legal battle between Kraken, a prominent crypto exchange, and the U.S. Securities and Exchange Commission (SEC) intensifies as Kraken lodges fresh arguments against the regulator's lawsuit, alleging inaccuracies in the language used.

In a recent development reported by Bloomberg, Kraken has submitted a letter this week, accusing the SEC of miswording its arguments in the charges levied against the exchange.

Kraken contends that the SEC's repeated use of terms like investment "concept" and "ecosystem" is erroneous, as the correct terminology should be "investment contract" and "enterprise." According to Kraken, the regulator's allegations fail to identify any investment contracts tradable on the platform.

The SEC, in response, has previously emphasized that legal determinations aren't solely reliant on specific terms but also encompass broader actions, as per established case law principles.

The legal feud dates back to November, when the SEC initiated a lawsuit against Kraken, alleging the exchange's operations lacked proper licensing. The lawsuit asserts that Kraken functioned unlawfully as a securities exchange, broker, dealer, and clearing agency since 2018, accruing substantial revenues. Moreover, the SEC expressed concerns about potential commingling of client funds with Kraken's assets, potentially exposing both parties to financial risks.

The SEC's legal action seeks a permanent injunction against Kraken's unregistered exchange activities, alongside penalties and restitution for unlawfully obtained funds.

This legal tussle mirrors similar SEC crackdowns on major crypto exchanges like Binance and Coinbase in June 2023. Both exchanges faced accusations of violating securities laws, echoing the regulatory challenges encountered by Kraken.

As the legal battle unfolds, Kraken's assertions regarding the SEC's wording underscore the nuanced complexities surrounding regulatory compliance within the crypto space, with potential ramifications for industry participants and legal precedents moving forward.