U.S. District Judge William H. Orrick ordered Kraken, the well-known cryptocurrency exchange, to respond to the SEC’s allegations of securities law violations within 20 days.
Securities and Exchange Commission (SEC) Claimsthat Kraken operates as an unregistered securities exchange and offers digital assets that it considers to be investment contracts and, as such, falls within the scope of securities laws.
This is part of SEC Chairman Gary Gensler’s broader crackdown on crypto platforms that allegedly do not comply with existing securities regulations.
Kraken argues that digital tokens should not be classified as securities and that the SEC does not have the authority to regulate them. However, the court’s decision to proceed with the case suggests that Kraken could face a lengthy legal battle. This comes at a particularly difficult time for the exchange, which is seeking financial backing for a potential IPO.
The case highlights the inconsistencies in legal decisions on digital assets. While some courts, such as the one in Manhattan, have ruled that certain tokens (e.g.
