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According to Kraken’s legal director Marco SantoriIn the Kraken lawsuit, the SEC unconditionally lost its “tokens are securities” theory and will not be allowed to rely on it in the future, dealing a major blow to the agency in its attempt to classify cryptographic tokens like securities.
In November 2023, the SEC charged Kraken with the operation of an unregistered securities exchange, broker, dealer and clearing agency. Kraken had asked the judge to dismiss the SEC’s action.
Kraken, like Ripple, has argued that the SEC has no authority over digital assets. In a recent ruling on Kraken’s motion to dismiss the SEC’s request, the court made the same distinction as in the Ripple case: a token is not a security, but agreements around a token could being.
This legal statement has attracted the attention of the XRP community. Bill Morgana crypto lawyer and XRP enthusiast, commented in an article
Ripple decision hailed as major win for industry
THE Ripple The ruling, which determined that XRP was only covered by securities law when sold to institutional investors, was hailed as a significant victory for the industry.
Ripple scored another victory earlier this month when it was ordered to pay a $125 million civil penalty for its sales to institutional investors, a fraction of the nearly $2 billion in fines requested by the SEC.
Related
According to SEC Chairman Gary Gensler’s theory, most digital tokens are unregistered securities and should be subject to SEC oversight. Gensler harshly criticizes cryptocurrency exchanges and the digital asset market for their apparent non-compliance.
Although the court denied Kraken’s motion to dismiss the SEC’s lawsuit, Kraken CLO Marco Santori hailed the recent ruling as an important victory. In a tweet, Santori wrote: “Today, the US District Court for the Northern District of California ruled, as a matter of law, that none of the tokens traded on Kraken are securities. This is a significant victory for Kraken, for the principle of clarity. and for crypto users around the world. »