A court has denied Kraken's attempt to appeal a ruling allowing the SEC's lawsuit, which accuses the platform of selling unregistered securities.
Kraken's Legal Arguments Rejected
In September, Kraken sought to appeal the August ruling denying its motion to dismiss the SEC case. Judge William Orrick rejected arguments suggesting investment contracts require formal agreements or post-sale obligations. He noted that no court since Howey has required such formalities, further supporting existing judicial conclusions contrary to Kraken's stance.
SEC Tightens Its Case
The SEC recently moved to strike three of Kraken’s defenses, arguing that laws clearly define investment contracts and provided sufficient compliance notice to Kraken. The judge considered these arguments in his decision, acknowledging that these defenses could lead to irrelevant and burdensome discovery efforts.
Background of the Case
The SEC's lawsuit accuses Kraken of failing to register as an exchange, broker, or clearing agency. The ongoing legal proceedings aim to ascertain whether Kraken's operations violate securities laws—a ruling with potential wide-reaching implications for the crypto industry. Despite current legal challenges, Kraken plans to launch its blockchain 'Ink' in 2025. The company has yet to publicly respond to the recent court decision.
The ongoing case against Kraken remains a significant issue in the SEC's broader regulatory efforts targeting crypto platforms.
