A US court has made a significant decision for the crypto industry, siding with the Securities and Exchange Commission (SEC) in its lawsuit against crypto exchange Kraken.
Significant Ruling for Kraken
Judge William Orrick denied Kraken's attempt to dismiss the SEC lawsuit. This ruling affirms that crypto assets can be classified as investment contracts under the Howey test.
Ripple Case Analogy
Last July, Judge Analisa Torres recognized secondary sales of the XRP token as non-securities, but Judge Jed Rakoff declined to distinguish between primary and secondary market transactions. Judge Orrick aligned with the Ripple ruling and noted that this is the first time a court has dealt with the exchange of third-party tokens on secondary platforms.
Court's Decision and Implications
Judge Orrick also ruled that the SEC's case does not violate the Major Questions Doctrine, noting that the cryptocurrency industry is too small to invoke this doctrine. The SEC's lawsuit against Kraken includes tokens such as Cardano (ADA), Solana (SOL), and others.
The court's decision in favor of the SEC in the case against Kraken highlights the importance of regulating crypto assets and could impact future legal proceedings in this field.
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