The judge denied Kraken’s motion to dismiss the SEC’s lawsuit.

US District Judge William H. Orrick has ruled that the US Securities and Exchange Commission has a compelling case against crypto exchange Kraken.
The judge said the SEC's lawsuit against Kraken will continue.

A judge has ruled that the US Securities and Exchange Commission's lawsuit against a crypto exchange will continue.

On Friday, August 23, 2024, US District Judge William Orrick denied Kraken's request to dismiss the SEC's lawsuit. In court documents filed on Friday, the judge stated that the charge that the regulator crypto exchange offered unregistered securities is plausible.

“Kraken denies that it has ever been registered with the agency, but says it doesn't need to because the transactions it enables on its platform don't involve securities and don't fall under SEC regulatory policy. But the SEC says at least some of the crypto transactions Kraken facilitates on its network constitute investment contracts and therefore securities and are therefore subject to securities laws.” They are, Judge Orrick wrote in his decision.

Solana among unregistered securities

In its lawsuit against Kraken, the SEC listed 11 cryptocurrencies it claims were sold as investment contracts. These are Cardano (ADA), Algorand (ALGO), Cosmos Hub (ATOM), Filecoin (FIL), Flow (Flow) and Internet Computing (ICP).

Others are Decentraland (MANA), Polygon (MATIC), Near (NEAR), OMG Network (OMG), and Solana (SOL).

The judge's opinion, provided as part of the ruling, said, “All the SEC needs to do is allege that at least one of these cryptoassets is being traded as an investment contract to enforce its claim.

The SEC has sued several crypto exchanges, including Binance and Coinbase. The regulator filed a lawsuit against Kraken in November 2023.