Former SEC Chairman Gary Gensler, who resigned from his post on January 20 when Donald Trump took office, filed lawsuits against many cryptocurrency platforms during his term.
At this point, there has been a new development in the lawsuit filed by the SEC against the leading crypto exchange Kraken for alleged unregistered securities sales.
The court overseeing the case rejected one of Kraken’s defense arguments.
Kraken argued in its defense that the SEC lacks the legal authority to regulate the crypto market through litigation and that the SEC cannot act unless authorized by Congress.
However, court judge William Orrick rejected Kraken’s objection, stating that the SEC’s jurisdiction over the case could not be questioned.
This objection, also known as the “important questions doctrine,” was one of the biggest criticisms leveled against the SEC by many exchanges in the lawsuits. Because the giants that the SEC sued, such as Binance and Coinbase, also claimed that the SEC exceeded its authority.
The SEC filed a lawsuit against Kraken in November 2023, alleging that the exchange operated as a securities exchange without registration and that Payward Inc. and Payward Ventures, which operate Kraken, have also violated securities laws since 2018.
The SEC had also filed a staking lawsuit against Kraken prior to the securities violation allegations, but that case ended in a settlement with Kraken paying $30 million.
*This is not investment advice.
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