The judge rules that the SEC must deal with the lawsuit filed by Kraken last November. Kraken argued that its transactions were not subject to SEC regulation. Political pressure on the agency is mounting during the election season.
Crypto exchange Kraken faces a lawsuit filed by the US Securities and Exchange Commission accusing it of operating an unregistered securities exchange, after a federal judge rejected a bid to dismiss the case.
“The SEC alleges that at least some of Kraken's cryptocurrency transactions on its network constitute investment contracts and are therefore securities and, accordingly, subject to the securities laws,” District Judge William H. Orrick wrote. opinion Published in San Francisco Federal Court.
Kraken argues that transactions on its platform do not involve securities and therefore do not need to register with the agency because they are not regulated by the SEC.
The SEC originally filed suit last November, Claiming Kraken's crypto trading platform acts as an unregistered securities exchange, broker, dealer and clearing agency.
The lawsuits are similar to charges brought by the SEC against Binance and Coinbase earlier last year, News reported.
The lawsuits explain that the SEC and its chair Gary Gensler are committed to complying with securities laws and holding crypto firms responsible for registration like traditional brokerages and exchanges.
Crypto industry leaders, including Coinbase CEO Brian Armstrong and the Blockchain Association, the industry's lobbying group, rejected the claim that digital assets and the companies that offer them are subject to the same laws that govern stocks and bonds.
Crypto pundits have complained that the SEC is controlling through enforcement, creating a hostile environment for the industry in the US.
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And the current election season has seen increased political pressure against the SEC and Gensler over the agency's crypto policies.
Tyler Winklevoss, co-founder of crypto exchange Gemini said Posted in X The crypto industry should demand to know who will be the next SEC chair before the November elections, as a repeat of the past four years cannot be tolerated.
There are also crypto-friendly Democrats Asked Gensler should be replaced by a pro-innovation SEC chair.
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