Kraken Asks Court to Dismiss SEC Claims to Avoid ‘Significant Reordering’ of U.S. Financial Structure

Kraken’s latest reply to the SEC’s motion to dismiss hinges on the extent to which one can interpret the SEC’s jurisdiction by using the Howey test which determines what is and is not a security. It does so by determining whether four criteria are met – an investment of capital, in a common enterprise, with the expectation of profit, driven by the efforts of others.

“The SEC cannot satisfy Howey’s additional requirements that there be investments of money in a common enterprise with a reasonable expectation of profits based on the efforts of others,” Kraken’s lawyers wrote. “This would gut Howey by significantly expanding the SEC’s jurisdiction to a host of investment activities that were never delegated to the agency. Such a significant reordering of the U.S.’s financial regulatory structure should be debated in Congress, not in the courts.”

Source: Kraken Asks Court to Dismiss SEC Claims to Avoid ‘Significant Reordering’ of U.S. Financial Structure