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SEC Drops Yuga Labs Investigation and Kraken Case
Regulation | March 4, 2025
Image: Freepik/rawpixel.com
More SEC Crypto Cases Dropped as Regulatory Rollback Continues
As the SEC retreats from its regulate by enforcement approach from the prior administration, major SEC cases against the crypto world are dropping faster than a meme coin in a bear market. In a previous NCFA article, we covered that the SEC had already dropped, paused, or closed major cases that in some cases were years in the making including Robinhood, Coinbase, OpenSea, Uniswap, Binance, Ripple and ConsenSys. Now Yuga Labs and Kraken are the latest to join the relief list.
Yuga Labs Investigation Closed
On March 3, 2025, Yuga Labs shared that the SEC has officially dropped its investigation into the company’s non-fungible token (NFT) sales. The investigation had been ongoing for almost three years and was looking into whether Yuga NFTs should be treated as securities. This news is a big win for digital creators and the NFT space, foreshadowing that NFTs may not be classified as stocks and other traditional assets so they don't have to meet the same strict financial regulations.
Yuga Labs post on X:
After 3+ years, the SEC has officially closed its investigation into Yuga Labs. This is a huge win for NFTs and all creators pushing our ecosystem forward. NFTs are not securities.
Kraken Claims Legal Victory
Also on March 3, 2025, Kraken announced that the SEC had dismissed its lawsuit against the company. The case heated up in early 2023 and was filed later that year, accusing Kraken of operating as an unregistered securities exchange. With this decision, Kraken can continue running its business as usual without paying any fines or making changes to how it operates. This supports the argument that crypto exchanges can function under existing regulations without facing harsh enforcement actions.
Kraken celebrated the news in this blog post:
“The SEC’s case against us has been dismissed, with no fines, no restrictions on our business, and no admission of wrongdoing. This is a victory not just for Kraken but for the broader crypto industry.”
Regulatory Developments to Watch
This Friday March 8, the White House is hosting a crypto summit where top industry leaders and government officials will debate the future of digital assets. The event is expected to influence upcoming regulations and will no doubt provide insight into the SECs future direction on crypto regulations.
See: Trump’s U.S. Crypto Reserve Sparks Market Surge, Debate
At the same time SEC Commissioner Hester Peirce has launched a consultation process to update outdated financial regulations. Her goal is to create a more flexible framework that supports blockchain innovation and decentralized finance. Peirce has consistently advocated for fair and innovation friendly regulations, and this is industry's opportunity to provide input into the future of crypto regulations that will be clear and comprehensive. Read more about the scope of the digital asset consultations and insights here.
Final Thoughts
The National Crowdfunding & Fintech Association of Canada (NCFA) views these developments as a positive step toward a balanced regulatory approach that fosters both investor protection and innovation. NCFA will continue advocating for fair, and forward thinking policies as the crypto landscape evolves.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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