Kraken’s legal team contends that the Securities and Exchange Commission’s (SEC) arguments lack substance in their recent court filing as both parties brace for a June hearing.
The court document, filed on Thursday, asserts that the SEC has not identified any investment contracts traded on Kraken’s platform.
Additionally, Kraken argues that the SEC has not met the requirements of the Howey Test, a pivotal case for determining securities.
In November, the SEC sued Kraken’s parent firms, Payward and Payward Ventures, alleging the operation of an online trading platform that posed risks to customers. Kraken moved to dismiss the lawsuit in February.
A hearing for Kraken’s dismissal motion is scheduled for June 12. In an April filing, the SEC rebuffed Kraken’s claim that investment contracts necessitate written agreements.
Kraken’s legal team applied the “major questions doctrine” in their latest filing, asserting that the SEC’s actions require clear congressional authorization for matters of significant national importance.
The SEC countered that emerging technologies do not fall outside traditional securities law, and congressional action is not mandatory for regulating new technologies.
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