Kraken Intervenes in Lawsuit Claiming XRP is a Security

Popular U.S.-based exchange Kraken files a motion to intervene in the ongoing Zakinov v. Ripple lawsuit, which alleges that XRP is a security.

Kraken’s filing in the case was in response to a court order mandating all U.S.-based crypto exchanges to submit private trading data of their XRP customers.

Aside from customers’ trading data, the court also wants exchanges in the U.S. to disclose the identities of customers who traded XRP.

Kraken Defends Users’ Privacy

Instead of revealing its users’ trading information, the prominent crypto exchange expressed concern about the potential risks of revealing its customers’ sensitive information.

Although Kraken took a neutral stand in the case, it feared customers might misconstrue its compliance as a form of support to the plaintiff.

Kraken fears that revealing its customers’ private trading data could undermine its relationship with its clients and jeopardize users’ trust.

The exchange’s concern could help it preserve its reputation while emphasizing the importance of user privacy within the crypto space.

Zakinov v. Ripple

For context, the primary issue in the Zakinov v. Ripple legal tussle is whether XRP in itself should be classified as a security or currency. In the lawsuit, the plaintiff, Zakinov, charged Ripple, its CEO Brad Garlinghouse, and its subsidiary XRP II with offering XRP as an unregistered security.

However, Ripple denied this claim, arguing that XRP is similar to other cryptocurrencies like Bitcoin and Ethereum. Despite Ripple challenging the certification of the lawsuit, U.S. District Judge Phyllis J. Hamilton certified the class in June.

Per the ruling, the judge asserted that the class met the four requirements for certification. While the verdict sparked concern among XRP investors, Attorney John Deaton pointed out that the class applies to U.S. investors.

He described the class action as a mere pimple compared to Ripple’s lawsuit against the Securities and Exchange Commission (SEC), emphasizing that the latter has far-reaching implications.

Will the Zakinov Judge Follow Judge Torres’s Ruling 

Notably, less than two weeks after the U.S. District Court for the Northern District of California certified the class against Ripple, Judge Analisa Torres issued her summary judgment decision.

In the SEC v. Ripple ruling, the judge found that XRP in itself is not a security. She also held that Ripple did not violate the law by selling XRP on exchanges via blind bid/ask transactions.

Whether Judge Hamilton will follow Judge Torres’ ruling on XRP remains to be seen.

It bears mentioning that Kraken relisted XRP shortly after Judge Torres declared the coin as a non-security.