{"id":39241,"date":"2025-01-27T08:25:59","date_gmt":"2025-01-27T08:25:59","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=39241"},"modified":"2025-01-27T08:25:59","modified_gmt":"2025-01-27T08:25:59","slug":"sec-partially-wins-case-against-kraken-judge-dismisses-key-defense-on-crypto-regulation","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=39241","title":{"rendered":"SEC Partially Wins Case Against Kraken, Judge Dismisses Key Defense On Crypto Regulation"},"content":{"rendered":"

The US Securities and Exchange Commission (SEC) <\/span>achieved a partial victory<\/span> in its legal battle against Kraken as a federal judge in California dismissed one of the crypto <\/span>exchange\u2019s<\/span> central defenses. <\/span><\/p>\n

On 24 January 2025, Judge William Orrick <\/span>ruled against <\/span>Kraken\u2019s<\/span> use<\/span><\/a> of the<\/span> \u201c<\/span>major questions doctrine,<\/span>\u201d <\/span>which claims that federal agencies cannot exercise powers not explicitly granted by Congress.<\/span><\/p>\n

The SEC had filed a motion to strike three of <\/span>Kraken\u2019s<\/span> defenses in a lawsuit accusing the exchange of offering unregistered securities. <\/span><\/p>\n

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Judge Rules <\/span>SEC\u2019s<\/span> Crypto Authority Aligns with Congressional Intent<\/span><\/h2>\n

Judge Orrick found that the <\/span>SEC\u2019s<\/span> authority over digital assets did not exceed Congressional intent, stating that <\/span>cryptocurrency, while<\/span> growing<\/span>, <\/span>has not yet reached the economic significance of industries like energy or student loans\u2014common examples in major questions doctrine cases.<\/span><\/p>\n

However, Judge Orrick upheld <\/span>Kraken\u2019s<\/span> \u201c<\/span>fair notice<\/span>\u201d <\/span>defense, allowing the exchange to argue that the SEC failed to provide clear guidance on whether its activities violated securities laws. <\/span><\/p>\n

He noted that Kraken had<\/span> \u201c<\/span>plausibly alleged<\/span>\u201d <\/span>it was unclear whether the Howey Test\u2014used to determine if an asset qualifies as an investment contract\u2014applied to secondary market transactions on its platform.<\/span><\/p>\n

The SEC initially filed its lawsuit in November 2023, alleging that Kraken had been operating as an unregistered securities exchange since 2018. Although Kraken sought to dismiss the case, a federal court rejected its motion in August 2024. <\/span><\/p>\n

Kraken continues to deny the <\/span>SEC\u2019s<\/span> allegations and formally disputed them in a September filing.<\/span><\/p>\n

#Kraken<\/a>\u2019s Legal Blow: #SEC<\/a>\u2019s Grip on #Crypto<\/a> Tightens<\/p>\n

Kraken just hit a rough patch in court. A U.S. judge, William Orrick, shut down their argument that the SEC has no say over crypto. Basically, Kraken tried to use this legal move called the \u201cmajor questions doctrine,\u201d which\u2026 pic.twitter.com\/sJj4fS1z2X<\/a><\/p>\n

\u2014 Crypto-00711 (@00711Crypto) January 27, 2025<\/a><\/p>\n\n

This case is part of the <\/span>SEC\u2019s<\/span> broader enforcement efforts in the crypto sector. Under Commissioner Hester Peirce, the agency has formed a task force to establish <\/span>clearer<\/span> regulatory guidelines for digital assets.<\/span><\/p>\n

As the lawsuit proceeds, <\/span>Kraken\u2019s<\/span> reliance on the fair notice defense could shape how courts interpret the <\/span>SEC\u2019s<\/span> authority over cryptocurrencies, potentially influencing future regulatory decisions in the industry.<\/span><\/p>\n

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Kraken Continues To Explore New Markets<\/span><\/h2>\n

Kraken has been exploring new markets and products recently, including launching a wrapped bitcoin token called kBTC on Ethereum and OP\u00a0<\/span>Mainnet,<\/span>\u00a0and eyeing a potential initial public offering (IPO<\/span>),<\/span> despite regulatory challenges with the U.S. Securities and Exchange Commission.<\/span><\/p>\n

Furthermore, the exchange has\u00a0<\/span>formed a partnership<\/span>\u00a0with UK football club Tottenham Hotspur. <\/span>As the football <\/span>club\u2019s<\/span> crypto and Web3 partner, Kraken will serve as <\/span>the <\/span>club\u2019s<\/span> official sleeve partner for <\/span>both<\/span> its <\/span>men\u2019s<\/span> and <\/span>women\u2019s<\/span> teams.<\/span><\/p>\n

In July, Kraken\u00a0announced\u00a0the expansion of its Custody services for institutional clients in the UK and Australia.\u00a0The US-based company is also eyeing\u00a0<\/span>European<\/span>\u00a0Union, Switzerland,\u00a0<\/span>Cayman<\/span>\u00a0Islands, and\u00a0<\/span>British<\/span>\u00a0Virgin Islands\u00a0in the near future.<\/span><\/p>\n

Kraken is also actively looking to broaden its reach in Europe.\u00a0Back in\u00a0May 2024, Kraken\u00a0entered the German market, partnering with local asset manager DLT Finance.<\/span><\/p>\n

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The post SEC Partially Wins Case Against Kraken, Judge Dismisses Key Defense On Crypto Regulation<\/a> appeared first on 99Bitcoins<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

The US Securities and Exchange Commission (SEC) achieved a partial victory in its legal battle against Kraken as a federal judge in California dismissed one of the crypto exchange\u2019s central defenses. On 24 January 2025, Judge William Orrick ruled against Kraken\u2019s use of the \u201cmajor questions doctrine,\u201d which claims that federal agencies cannot exercise powers […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-39241","post","type-post","status-publish","format-standard","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/39241"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39241"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/39241\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}