As a seasoned analyst with extensive experience in both traditional finance and cryptocurrencies, I find myself following this Kraken-SEC saga with a keen interest. The latest decision by Judge William Orrick to deny Kraken’s appeal is, in my opinion, a sensible move that keeps the ball rolling on resolving this case.
A federal judge in California has rejected Kraken’s petition for an appeal following a previous decision that lets the U.S. Securities and Exchange Commission (SEC) proceed with their lawsuit against the cryptocurrency exchange. Judge William Orrick, who made the ruling on November 18th, stated that granting the appeal would simply prolong the resolution of the case, as it stands now.
In November 2023, the Securities and Exchange Commission (SEC) filed a lawsuit against Kraken, alleging that they were functioning as a registered exchange, broker, dealer, and clearing agency without proper registration. The SEC contends that the digital assets traded on Kraken’s platform meet the criteria for securities under the Howey Test, making them subject to securities regulations.
Kraken contested these claims and attempted to get the case thrown out earlier, but Orrick chose not to grant that request back in August.
Kraken’s September appeal assertion suggested that there exists a significant debate about whether the Howey Test should be applied to situations where formal contracts or recurring duties are absent.
The exchange was hoping that a higher court might be able to answer these questions and possibly bring an early resolution to the case. Yet, Orrick disagreed with this approach, asserting that there is no prior ruling that supports Kraken’s understanding of investment agreements.
As a legal analyst, I’ve observed that various courts have weighed in on similar matters and haven’t aligned with Kraken’s stance on these issues. However, to establish definitively whether Kraken’s operations align fully with all aspects of the Howey Test, additional exploration through discovery is required.
Earlier this month, the SEC proposed discarding some of Kraken’s defense arguments, claiming these points might trigger excessive and unwanted investigation procedures. The court case is still active, with the discovery phase anticipated to be crucial in reaching a decision.
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2024-11-19 10:44