Kraken's motion to dismiss the SEC lawsuit was denied by a federal judge

ChainCatcher news, the application by cryptocurrency exchange Kraken to dismiss the SEC lawsuit has been rejected by a federal judge, which means Kraken must face the lawsuit filed by the U.S. SEC, accusing it of operating an unregistered securities exchange.

District Judge William H. Orrick wrote in an opinion issued in the San Francisco federal court, "The U.S. SEC reasonably claims that at least some of the cryptocurrency transactions facilitated by Kraken on its platform constitute investment contracts and therefore qualify as securities, thus subject to securities laws." Kraken had argued that it did not need to register with the agency because the transactions on its platform did not involve securities and therefore fell outside the SEC's regulatory scope.

It is reported that the U.S. SEC initially filed the lawsuit last November, claiming that Kraken's crypto trading platform operates as an unregistered securities exchange, broker, dealer, and clearing agency.