Crypto alternate Kraken has filed to dismiss a lawsuit introduced by the US Securities and Change Price (SEC), calling it a “unhealthy precedent” for company overreach.

The SEC sued Kraken in November, alleging the firm violated securities prison guidelines by appearing as an unregistered broker, dealer, alternate and clearing company. The SEC additionally accused Kraken of mixing as much as $33 billion in buyer and company funds, and had paid operational bills straight from bank accounts that assign buyer cash.

In a motion filed on Thursday, lawyers for Kraken requested the court to dismiss the lawsuit with prejudice, arguing that the SEC had didn’t plausibly hiss that any digital asset traded on Kraken will be labeled as a security or investment contract.

In a separate weblog post, Kraken said that allowing the case to proceed would plot a “unhealthy precedent” for alternate overreach.

“The SEC’s theory is that there’ll be an investment contract and not using a contract, no post-sale obligations and no interplay in any respect between the issuer and the purchaser,” said Kraken within the post.

“Howey has by no means been applied in this means, and for correct motive,” the firm said. “The hypothesis has no limiting theory. It would grant to the SEC boundless authority over commerce and potentially initiating up the floodgates to non-public securities law claims.”

Kraken CEO Dave Ripley claimed that the SEC’s actions had been politically motivated, highlighting in an X thread how the securities regulator told Kraken it used to be bringing a lawsuit a day after the firm testified in regards to the SEC’s “overreach in crypto and its flawed regulation-by-enforcement plot to protection making.”

Earlier this month, Kraken paid a $30 million honest to the SEC and agreed to forestall its staking-as-a-service platform for its US-based customers.