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A prominent legal expert known as "Metalawman" on X provided an update on the recent SEC v. Kraken hearing, which took place in federal court in San Francisco.
Yesterday, an oral argument was held on Kraken’s motion to dismiss the SEC’s enforcement action. Kraken’s dismissal motion focuses on Howey and contends that the SEC failed to plead that any securities transactions occurred on the Kraken platform.
Kraken garnered lots of amicus support for its motion, with Senator Lummis, Blockchain Association, DeFi Education Fund, Chamber of Digital Commerce, Investor Choice Advocates Network, Paradigm and two admin law scholars filing briefs.
The recently held court hearing, which centered on Kraken's motion to dismiss, concluded with a notable declaration from Judge William Orrick. Before any arguments were presented, Judge Orrick stated his inclination to follow the rulings of Judges Rakoff and Failla, indicating a likely denial of Kraken's motion to dismiss.
Tomiwabold OlajideMetalawman observed that the arguments made during the hearing did not seem to sway Judge Orrick's initial mindset. This development implies that the Kraken case might likely proceed to years of costly discovery, akin to the ongoing Ripple case.
Adding a layer of historical context, Metalawman noted that Judge Orrick's uncle served as a commissioner of the SEC in the 1950s. This familial connection to the SEC adds an interesting dimension to the judge's current role in the case.
The decision to deny the motion to dismiss might suggest that Kraken could face an extended legal battle with the SEC, entailing significant resources and prolonged scrutiny. As the case unfolds, it will be closely watched by the cryptocurrency community and legal experts, given its potential implications for the regulatory landscape of digital assets.
Alex Dovbnya
Godfrey Benjamin
Dan Burgin
Vladislav Sopov