The court has ordered exchanges to disclose the identities of all individuals who have traded the coin. However, Kraken is concerned that sharing such information will adversely affect its relationships with clients and erode user trust.
A few years ago, investor Vladi Zakinov initiated a class action lawsuit against Ripple, accusing its CEO Brad Garlinghouse of offering XRP as an unregistered security. Ripple has refuted these allegations, asserting that XRP is similar to Bitcoin and Ethereum, both of which are not deemed securities.
John Deaton, a lawyer representing XRP owners, suggests that this class action lawsuit is of minimal concern to Ripple as the company is currently engaged in a legal battle with the US Securities and Exchange Commission (SEC). Earlier this year, Judge Analisa Torres ruled that XRP does not meet the criteria to be classified as a security when sold on the secondary market. It remains uncertain whether Judge Phyllis Hamilton, who is presiding over Zakinov’s proceedings, will adopt the same reasoning.
In July, following Judge Torres’ ruling, Kraken relisted XRP on its platform, along with other major exchanges such as Bitstamp, Crypto.com, Gemini, and Coinbase. Back in April, Kraken had requested the court to reject a request by the IRS for user information. However, in October, the exchange conceded that it would share user data with the IRS.