As a seasoned crypto investor with a decade of experience navigating the volatile and ever-changing cryptocurrency market, this latest development between the SEC and Kraken has piqued my interest. I remember the Ripple ruling last year, which was a ray of hope for the industry. However, Judge Orrick’s stance aligning with the SEC on this matter seems to be a step backwards in our journey towards regulatory clarity.
In simpler terms, the United States Securities and Exchange Commission (SEC) won a major case against the digital currency trading platform, Kraken.
Judge William Orrick has denied the exchange’s attempt to dismiss the regulator lawsuit.
In the heat of last summer, Judge Analisa Torres handed me a significant victory as an investor in the blockchain sector. She acknowledged that the secondary transactions of the XRP token, belonging to the enterprise blockchain company Ripple, were not classified as securities.
Nevertheless, the decision sparked significant debate. For example, Judge Jed Rakoff chose not to make a clear distinction between primary and secondary market deals.
In summary, Judge Orrick has expressed agreement with the Ripple decision but also highlights that this is an unprecedented case, as it concerns the trading of third-party tokens on alternative platforms. He endorses the Securities and Exchange Commission’s stance that the secondary market for cryptocurrencies meets the criteria of the Howey test.
The core of the Securities and Exchange Commission’s accusations claims that these offerings during their initial sales and subsequent deals on Kraken were presented or traded as investment contracts. The court finds this interpretation valid, as it is a perspective that the SEC has consistently used in other cases.
Specifically, Judge Orrick has determined that the regulator’s argument does not contravene the Major Questions Doctrine. He has pointed out that the cryptocurrency market is currently not substantial enough to warrant the application of this doctrine.
It’s important to note that among the cryptocurrencies named in the SEC’s lawsuit against Kraken are Cardano (ADA), Solana (SOL), as well as several other digital tokens.
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2024-08-23 21:55