According to breaking information reported by Bloomberg, cryptocurrency exchange Kraken will face an SEC lawsuit due to its failure to register as a cryptocurrency exchange.
Cryptocurrency exchange Kraken has been allowed to settle a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), which accuses the platform of operating an unregistered securities exchange.
The decision by U.S. District Judge William H. Orrick allowed the case to proceed, marking a significant step in the SEC’s crackdown on the cryptocurrency industry.
“The SEC has plausibly alleged that at least some of the cryptocurrency transactions conducted on Kraken’s network constitute investment contracts and therefore securities and are accordingly subject to the securities laws,” Judge Orrick wrote in an opinion issued Friday in San Francisco federal court.
Kraken had sought to dismiss the lawsuit, which was first filed by the SEC in November, but the judge's decision keeps the regulatory challenge alive.
The decision follows reports from Bloomberg News in June that Kraken, one of the oldest and most established cryptocurrency exchanges, was exploring a final round of financing ahead of a potential initial public offering (IPO).
*This is not investment advice.
