Kraken says the crypto exchange is confident it will win its legal battle with the U.S. Securities and Exchange Commission (SEC).
Last week, U.S.; District Judge William H. Orrick denied Krakenโs request to dismiss the case filed by the SEC alleging that the exchange violated securities laws.
The regulator alleges that Cardano (ADA), Algorand (ALGO), Solana (SOL) and several other coins traded on Kraken are โcrypto asset securities.โ
Krakenโs chief legal officer Marco Santori says that while Judge Orrick decided to keep the case going, the exchange anticipates winning against the SEC given the courtโs ruling that none of the tokens trading on the exchange are securities.
โThe SEC unqualifiedly lost on this โtokens are securitiesโ theory, and will not be permitted to rely on it going forward.ย
Instead, it will need to prove, for every alleged transaction on Kraken, that the Howey test factors are satisfied.ย
They arenโt, and we look forward to proving this in discovery. Kraken will fight and Kraken will win.โ
The Howey test is a legal criteria often cited to determine whether a transaction counts as an investment contract or not.
According to the Howey test, an investment contract is โa contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.โ
Santori also urges US legislators to take action and address regulatory issues in the crypto sector.
โTo deliver clarity to the industry, to protect consumers and foster the growth of blockchain technology, Congress must pass a comprehensive market structure framework.ย
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.โ
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