Federal judge rejects Kraken's bid to dismiss SEC lawsuit

Cryptocurrency exchange Kraken's application to dismiss the SEC lawsuit was rejected by a federal judge, which means Kraken must face the lawsuit filed by the US SEC, accusing it of operating an unregistered securities exchange. District Judge William H. Orrick wrote in an opinion issued in the San Francisco federal court, "The US SEC reasonably claims that at least some cryptocurrency transactions facilitated by Kraken on its network constitute investment contracts and therefore constitute securities and are therefore subject to securities laws." Kraken had argued that it did not need to register with the agency because transactions on its platform did not involve securities and therefore did not fall under the SEC's regulatory scope. It is reported that the US SEC initially filed a lawsuit in November last year, claiming that Kraken's crypto trading platform operated as an unregistered securities exchange, broker, dealer and clearing agency. (DL News)