US Court Denies Kraken’s Motion to Dismiss SEC Lawsuit
The Federal Court for the Northern District of California has rejected a request to dismiss a lawsuit brought by the US Securities and Exchange Commission (SEC) against Payward Inc. and Payward Ventures, better known as crypto exchange Kraken.
The court order, filed on Friday, states that the SEC alleges Kraken operated as an unregistered broker, dealer, exchange, and clearing agency for crypto securities transactions.
According to the SEC, Kraken facilitates the exchange of several cryptocurrencies that the regulator considers as “investment contracts” under the Securities Act.
The court has ruled that the SEC has presented plausible evidence that some of Kraken’s cryptocurrency transactions can be classified as investment contracts, and therefore, subject to securities laws.
This means that the judge has found the SEC’s claims to be credible enough to warrant further investigation through discovery and a legal trial.
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