Gairika Mitra
The Federal Court for the Northern District of California passed a ruling on Saturday that no tokens trading on cryptocurrency platform Kraken will be considered securities.
Announced on X by Marco Santori, Chief Legal Officer for Kraken, this ruling indicates positive news for Kraken and the entire cryptocurrency space in general, reiterating Kraken’s stance that it doesn’t list securities on its platform.
“Today, the Federal Court for the Northern District of California ruled, as a matter of law, that none of the tokens trading on Kraken are securities. This is a significant win for Kraken, for the principle of clarity and for crypto users everywhere. It also confirms Kraken’s long-standing position that it does not list securities,” Santori said.
He added that the court found the SEC’s invention of the “crypto asset security” concept to be “unclear at best and confusing at worst.”
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Delving into more details, he shared that the court said a token isn’t a security, but agreements around a token could be considered as such. He questioned the qualifications of the SEC, stating it lost in their “tokens are securities” theory and therefore can’t be relied on in the future.
“Instead, it will need to prove, for every alleged transaction on Kraken, that the Howey Test factors are satisfied. They aren’t, and we look forward to proving this in discovery. Kraken will fight and Kraken will win,” he explained.
Santori expressed his displeasure with the fact the existing standard under SEC’s regulation is extensive, expensive, and time-consuming. He added that it’s a “litigation without end.”
“Today’s ruling confirms what we’ve been saying all along: the SEC cannot credibly regulate crypto by enforcement. To deliver clarity to the industry, to protect consumers and foster the growth of blockchain technology, Congress must pass a comprehensive market structure framework. We applaud all of those in our government working tirelessly to make this a reality and we thank the Court for its consideration of this case,” he concluded.
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Recently, Australia’s Federal Court ruled against Bit Trade Pty Ltd, the local operator of the Kraken cryptocurrency exchange for breaching regulations related to its margin trading product.
This isn’t the first time that the SEC has been called into question over its views and assertions about cryptocurrency, suggesting a need for an improved regulatory approach to the crypto market.
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GAIRIKA
Gairika is a cryptocurrency journalist with a focus on Bitcoin and blockchain technology.
