In a recent court hearing, Kraken and the SEC presented arguments over whether digital assets on the exchange are securities. The SEC suggests that Kraken operates as an "ecosystem" where tokens are sold as investment contracts, thus making them securities under the Howey test. Kraken's legal team argued that the rules should be applied equally to crypto as they are to everyone else. The judge has not yet ruled on the motion to dismiss but indicated he was leaning towards denial. This comes after Kraken settled with the SEC in February 2023, agreeing to pay $30 million and stop offering staking services to U.S. clients.