- The SEC filed a case against Kraken treating certain transactions as securities
- Kraken motion to dismiss was denied by the Northern District of California court
- Kraken now faces a full investigation and the possibility that the SEC may prevail
After the cases against Binance, Coinbase, and Ripple, the SEC has taken on Kraken.
Kraken filed a motion to dismiss the lawsuit, but the Northern District Court of California dismissed it and is now awaiting a full trial on whether to treat some transactions as securities.
SEC Case Against Kraken
The SEC filed a lawsuit against Kraken, claiming that the company has not registered as a broker, but conducts relevant transactions on its platform. In their view, this violates federal securities trading laws and requires regulation under SEC supervision.
Kraken filed a motion to dismiss the lawsuit, apparently hoping to escape SEC regulation like its predecessors, but that has not worked so far.
The Northern District of California sided with the SEC at this point and dismissed the petition, giving the case a chance to move forward.
Judge William H. Orrick emphasized that some of Kraken’s transactions could be considered investment contracts, opening up a full investigation.
A Partial Victory for Kraken
However, the judge also emphasized that not all of the transactions in the SEC’s lawsuit could be considered securities per se, but rather how these assets are bought and sold on the platform could bring them under the securities laws.
Obviously, this strengthens the SEC’s position in this case and gives them a better chance than they had with Binance and Coinbase, but it still doesn’t put an end to the standoff.
Conclusion
The SEC is desperately struggling to regulate crypto, moving from one platform to another.
And even though the court has already ended several times in favor of cryptocurrency platforms – the SEC does not leave its attempts, and obviously intends to fight to the last.
Of course, everything may change after the election, especially if Donald Trump wins.
We’ll be watching the investigation closely and how attitudes towards crypto will change in the wake of broader political changes.
