US Court Denies Kraken’s Motion to Dismiss a SEC Lawsuit

A federal court in the United States has rejected a request from cryptocurrency exchange Kraken to dismiss a lawsuit filed by the Securities and Exchange Commission (SEC).

The SEC has accused Kraken of operating as an unregistered securities exchange, broker, dealer, and clearing agency.

According to the court’s opinion, the SEC has provided sufficient evidence to support their claim that some of Kraken’s cryptocurrency transactions could be considered investment contracts and, therefore, securities.

This decision is a setback in the ongoing dispute between the industry and the SEC over the classification of cryptocurrencies as securities under US law.

In response to the ruling, an SEC representative stated that the existing framework for identifying securities, used for almost 80 years, still applies and investors in crypto assets should receive the same protections as investors in other securities, even when traded through intermediaries.