The U.S. Securities and Exchange Commission (SEC) has partially won in its case against Kraken, with a California judge rejecting the argument put forth by the exchange that Congress has not given the SEC authority over cryptocurrencies. The SEC has targeted several crypto exchanges, while also forming a crypto task force under Commissioner Hester Peirce to develop regulations for digital assets. Invalid Defense On January 24th, Judge William Orrick ruled that the Major Questions Doctrine Defense presented by Kraken was invalid , stating that the SEC was not claiming powers beyond what Congress intended. The doctrine suggests government agencies cannot use powers not explicitly granted by Congress. Other crypto firms, including Coinbase, Ripple, and Binance, have used this defense in their battles with the SEC. An Ongoing Battle However, Judge Orrick allowed the Fair Notice Defense presented by the cryptocurrency exchange to remain, as Kraken plausibly argued it was not properly informed that its actions violated the law. The SEC sued Kraken in November 2023, accusing the exchange of operating as an unregistered securities exchange since 2018. Kraken filed a motion to dismiss the case but was denied in August 2023, and the case is currently ongoing.
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