{"id":27586,"date":"2024-08-24T20:00:54","date_gmt":"2024-08-24T17:00:54","guid":{"rendered":"https:\/\/coinengineer.net\/blog\/?p=27586"},"modified":"2024-08-24T17:33:55","modified_gmt":"2024-08-24T14:33:55","slug":"krakens-request-to-dismiss-court-case-denied","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/krakens-request-to-dismiss-court-case-denied\/","title":{"rendered":"Kraken\u2019s Request to Dismiss Court Case Denied"},"content":{"rendered":"

A U.S. federal court has denied Kraken\u2019s request to dismiss the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) alleging that Kraken operates an unregistered securities exchange. The development was revealed in a court document dated August 23.<\/p>\n

In November, the SEC accused Kraken of \u201coperating its crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agent.\u201d<\/p>\n

According to the opinion of the U.S. District Court in Northern California, \u201cThe SEC has plausibly alleged that at least some of the cryptocurrency transactions that Kraken facilitates on its network constitute investment contracts and therefore securities and are therefore subject to the securities laws.\u201d<\/p>\n

A New Development in the Kraken and Crypto Sector SEC Battle<\/h2>\n

The decision is seen as a setback in the industry\u2019s ongoing battle with the SEC over which cryptocurrencies qualify as \u201csecurities\u201d under U.S. law.<\/p>\n

\u201cOnce again, the court has confirmed that the framework used for nearly 80 years to define securities is still valid, regardless of the labels used,\u201d an SEC spokesperson said. \u201cInvestors in crypto assets offered or sold as securities should receive the same protections as investors in other securities, even if they are traded through intermediaries.\u201d<\/p>\n

Might interest you: Justin Sun Eases Fears After $750M BTC Withdrawal from USDD<\/a><\/em><\/p>\n

The spokesperson noted that crypto trading platforms must register with the SEC and \u201cprovide safeguards against fraud and manipulation, prevention of commingling of client assets, and safeguards against conflicts of interest.\u201d \u201cUnless they do so, investors will continue to suffer harm.\u201d<\/p>\n

The Aug. 23 decision defines the definition of \u201csecurity\u201d broadly, looking not only at any formal investment contract, but also at the broader context in which these instruments \u2014 in this case, virtual assets \u2014 are marketed and sold.<\/p>\n

\u201cContractual formalities are not required for something to qualify as an investment contract and therefore a security,\u201d the court said. \u201cWhat matters is the totality of the circumstances surrounding a sale, trade or exchange and the investor\u2019s expectations.\u201d<\/p>\n

Kraken\u2019s chief legal officer Marco Santori said in a post on the X platform on August 23 that the court had in fact ruled that \u201clegally, no token traded on Kraken is a security.\u201d<\/p>\n

\u201cBasically, in the Kraken case, the Court made the same distinction as in the Ripple case: A token is not a security, but agreements around a token can be,\u201d Santori said.<\/p>\n

Therefore, the SEC \u201cwill have to prove that the Howey Test factors were met for each and every transaction alleged at Kraken. They are not, and we look forward to proving that,\u201d Santori said.<\/p>\n

\n

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don\u2019t forget to follow us on our\u00a0Telegram,\u00a0<\/strong><\/a>YouTube<\/strong><\/a>,\u00a0and\u00a0Twitter<\/strong><\/a>\u00a0channels for the latest news and updates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

A U.S. federal court has denied Kraken\u2019s request to dismiss the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) alleging that Kraken operates an unregistered securities exchange. The development was revealed in a court document dated August 23. In November, the SEC accused Kraken of \u201coperating its crypto trading platform as an unregistered<\/p>\n","protected":false},"author":6,"featured_media":6094,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1564,8137,39,8138],"class_list":["post-27586","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-genel","tag-kraken","tag-kraken-sec","tag-sec","tag-sec-kraken-case"],"yoast_head":"\nKraken\u2019s Request to Dismiss Court Case Denied - Coin Engineer<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/krakens-request-to-dismiss-court-case-denied\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kraken\u2019s Request to Dismiss Court Case Denied - Coin Engineer\" \/>\n<meta property=\"og:description\" content=\"A U.S. federal court has denied Kraken\u2019s request to dismiss the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) alleging that Kraken operates an unregistered securities exchange. 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