🚀 Kraken’s Appeal Rejected: Legal Battle Takes a New Turn
posted 19 Nov 2024
A U.S. federal judge has denied Kraken’s attempt to challenge a decision allowing the SEC’s case against the exchange to proceed. The legal battle between one of the largest crypto exchanges and the regulator is far from over.
There is significant speculation that Hester Peirce, a well-known crypto advocate who supported Kraken in February 2023, may take over as SEC chair.
U.S. District Judge William Orrick ruled in favor of the SEC’s arguments, applying the Howey Test to classify cryptocurrencies traded on Kraken as investment contracts. Established in 1946, this long-standing framework remains the benchmark for defining financial assets under U.S. securities laws.
In the November 18 ruling (case no. 3:23-cv-06003), the court determined that cryptocurrencies fall within the scope of securities regulations. As a result, Kraken must comply with these laws and delist the affected assets from its platform.
The court rejects Kraken’s appeal. Source: courtlistener.com
Kraken’s legal team argued that the interpretation of securities laws remains highly contested, but Judge Orrick rejected their claims, finding the SEC’s position more robust and persuasive.
The appeal, filed over a year ago, was ultimately dismissed, forcing Kraken to prepare for the next phase of its legal battle with the regulator.
This ruling could be one of the final examples of the SEC’s aggressive stance against cryptocurrencies under its current leadership. A change in SEC leadership is anticipated following Donald Trump’s inauguration, potentially altering the regulatory landscape.
There is significant speculation that Hester Peirce, a well-known crypto advocate who supported Kraken in February 2023, may take over as SEC chair.
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