A California federal judge has partially dismissed the defense of the cryptocurrency exchange Kraken in its case against the U.S. Securities and Exchange Commission (SEC), marking a small victory for the regulator.
SEC's Position and Kraken's Defense Reduction
Judge William Orrick ruled that part of Kraken's defense based on the 'major questions doctrine' was dismissed. This doctrine prohibits government agencies from exercising powers not specifically delegated by the U.S. Congress. However, the judge noted that the agency was not overstepping its congressional authority.
Court's Ruling on Major Questions
In dismissing Kraken's defense on major questions, Judge Orrick stated: 'I have already determined that the major questions doctrine is not implicated in this case, at least under the current facts, and GRANT the motion to dismiss it.' He also remarked that cryptocurrency is still an evolving 'financial instrument' that has not yet risen to the level of significance comparable to the American energy market or billions of dollars of outstanding student debt.
Crypto Community's Reaction to Court Decision
The crypto community reacted with mixed emotions to the court's decision. Stuart Alderoty, Ripple's chief legal officer, noted that SEC lawyers continue to play 'old games,' earning another 'admonishment' from the judge. Others in the community expressed that the case might set a precedent for future cryptocurrency regulation in the U.S.
The court's ruling adds uncertainty to the current legal environment for cryptocurrency companies, but also emphasizes the need for further clarification of the regulatory framework in this rapidly evolving sector.
