In a most curious turn of events, the esteemed US Securities and Exchange Commission has found itself basking in the glow of a partial victory, as a California federal judge, the venerable William Orrick, has decided to cast aside Kraken’s rather audacious defense. It seems that Kraken, in its infinite wisdom, believed that Congress had not bestowed upon the SEC the power to meddle in the affairs of cryptocurrency. Oh, the audacity! 😏
On a fateful day, January 24, Judge Orrick wielded his gavel with the grace of a seasoned conductor, declaring that Kraken’s “major questions doctrine defense” was to be unceremoniously tossed into the legal abyss. This doctrine, which posits that government agencies cannot wield powers not explicitly granted by Congress, has been the rallying cry for other beleaguered crypto companies like Coinbase, Ripple, and Binance. One can only imagine the collective sigh of relief from these entities, as they cling to their legal lifelines. 🧐
Judge Orrick, in his infinite wisdom, remarked that the SEC was not attempting to assert a “highly consequential power” that Congress had not reasonably intended to bestow. One can almost hear the echoes of laughter from the halls of Congress, as they ponder the implications of cryptocurrency on the grand stage of the American economy. “Cryptocurrency,” he mused, “is a growing financial instrument, but it has not risen to a level of economic import that is reasonably comparable to the American energy market, or billions of dollars of outstanding student loan debt.” Ah, the irony! 💸
However, not all was lost for Kraken, as Judge Orrick graciously allowed the “fair notice” defense to remain in play. It appears that Kraken had “plausibly alleged” that the SEC had not provided adequate notice of its alleged transgressions, which could very well infringe upon the sacred tenets of due process. The judge, with a twinkle in his eye, noted that the SEC must demonstrate that any ordinary entity in Kraken’s position would have understood that the Howey test applied to their secondary market transactions. A tall order indeed! 🤔
In November 2023, the SEC had launched its legal assault on Kraken, claiming that the exchange had been operating as a securities exchange without the necessary registration. The plot thickens, as it also accused Payward Inc and Payward Ventures, the masterminds behind Kraken, of violating securities laws since the distant year of 2018. Time flies when you’re having fun, doesn’t it? ⏳
The saga has unfolded in several acts, with a US federal court previously denying Kraken’s motion to dismiss the SEC’s lawsuit in August. Kraken, not one to back down easily, countered the SEC’s allegations in a September filing, proving that the spirit of defiance is alive and well in the world of cryptocurrency.
As the SEC continues its crusade against multiple crypto exchanges, it has also established a crypto task force, led by the ever-optimistic Commissioner Hester Peirce, dedicated to crafting a framework for digital assets. One can only hope that this task force will bring clarity to the murky waters of cryptocurrency regulation, or at the very least, provide some comic relief in this legal drama. 🎭
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2025-01-27 09:02