Kraken's Top Lawyer: Tokens Are Not Securities, Court Says in Latest Case

IconCryptoNewsTerminal Staff23 Aug, 2024

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Kraken's Top Lawyer: Tokens Are Not Securities, Court Says in Latest Case

Kraken's Chief Legal Officer (CLO) Marco Santori articulated via X that "In this case, the court drew the same distinction as in the Ripple (XRP) case; tokens are not securities, but securities can be wrapped around tokens, which would make them an investment contract." He further stated, "This undermines the SEC's claim that 'tokens are securities,' and going forward, Kraken will have to prove that the Howey Test elements are not met for each of its transactions. Kraken is likely to prevail in this litigation." Ripple CLO Stuart Alderoty also stated that "In the Kraken case, the court reaffirmed that there's no such thing as a 'crypto security.' This should be unwelcome news for the SEC." Earlier, a US court denied Kraken's motion to dismiss a lawsuit by the SEC, which accused the former of operating an unregistered crypto exchange, stating that "the SEC has plausibly alleged that some of the transactions facilitated by Kraken were investment contracts and thus subject to the securities laws."

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