Court Rejects Kraken's Request for Documents
In the legal battle between cryptocurrency exchange Kraken and the U.S. Securities and Exchange Commission (SEC), the court issued a significant ruling. It denied Kraken's request to compel the production of documents related to Bitcoin (BTC), Ethereum (ETH), public SEC statements, and internal regulatory policies on digital assets.

Court Dismisses Kraken's Request for SEC Documents

Magistrate Judge Robert Illman of the California court rejected Kraken’s demand for key documents. Kraken sought evidence on why the SEC excluded Bitcoin and Ethereum from its complaint, despite these assets being traded similarly to 11 other tokens on the platform.

The court found this request “unpersuasive”, stating that it was overly broad and irrelevant to the SEC’s claims regarding the 11 tokens. Additionally, the court noted that such requests would impose an unnecessary burden on both parties.

SEC Policies and Public Statements Deemed Irrelevant

Kraken also requested access to internal SEC policies and guidance regarding digital assets, including the application of the Howey Test to tokens traded on its platform. The court ruled that such information extends beyond the scope of tokens like ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL, making it irrelevant to the case.

The judge stated:
“For the reasons outlined below, the defendants' motion to compel the requested information is denied.”

The court further rejected Kraken’s request for evidence related to public SEC statements about digital asset regulation. While Kraken argued that former SEC Division Director William Hinman’s remarks were relevant to the status of Bitcoin and Ethereum under federal securities laws, the court found this argument insufficiently supported.

SEC Arguments and Prior Court Rulings

Judge William Orrick previously confirmed that contracts and expectations related to sales could form an investment contract. Based on this reasoning, the court had earlier denied Kraken’s motion to dismiss the SEC lawsuit.

The SEC contended that during initial offerings and subsequent transactions on Kraken, these assets were sold as investment contracts, in violation of federal securities laws.

Ripple and SEC Appeals

As part of broader regulatory issues in the crypto industry, the SEC plans to file its principal appeal brief by January 15. Meanwhile, Ripple has countersued, criticizing the SEC’s rules and guidance as inconsistent and unclear. Ripple’s appeal focuses on defining an investment contract, institutional sales of XRP, and fair notice protections.

The Kraken vs. SEC case highlights the complexities of cryptocurrency regulation and is likely to set a precedent for future legal disputes in the industry.


#Kraken , #SECCryptoRegulation , #CryptoNewss , #digitalassets , #cryptoregulation


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