The Chamber of Digital Commerce has filed an amicus curiae in defense of the crypto exchange Kraken in the lawsuit initiated by the US SEC, according to court filings on Feb. 27.

The Chamber clarified that the purpose of the amicus brief is to challenge the SEC's attempted regulation of the digital asset industry through enforcement without legislative authority.

In a statement on X, the CDC emphasized, "Enforcement is NOT enough. While Congress works on solutions, [the SEC’s] aggressive approach stifles innovation. Fair regulations can open opportunities for economic growth, job creation, and financial inclusion."

The trade body argued that the SEC's assertion that securities laws can be expanded to regulate all digital asset transactions is "wrong as a matter of law," insisting that digital assets are "not inherently investment contracts."

Furthermore, the Chamber warned of the broader implications of enforcement, describing the SEC's stance as "a threat to the adoption and advancement of blockchain technology." It also contended that this could significantly impact the trillion-dollar digital asset space and the US economy.

The filing notably references other high-profile cases where the SEC did not achieve a wholly favorable outcome, including those against Ripple and Terraform Labs.

The SEC initially sued Kraken in November 2023, alleging that the exchange operated an unregistered securities exchange, broker, dealer, and clearing agency, among other actions. Kraken and its representatives have refuted the SEC's charges and are contesting the case in court. Kraken filed a motion to dismiss the case on Feb. 23, highlighting that the allegations primarily pertain to failure to register rather than fraud.

The Chamber of Digital Commerce expressed support for Kraken's motion to dismiss the lawsuit in its latest filing.

This case is separate from a previous case involving Kraken's staking services, where Kraken settled with the SEC for $30 million and ceased offering those services in the US in February 2023.

Two other crypto exchanges, Coinbase and Binance, are also involved in similar SEC cases alleging unregistered exchange operations, which began in June 2023.