A federal judge in California has denied Kraken's request to appeal a decision that allows a Securities and Exchange Commission (SEC) lawsuit to proceed. Judge William Orrick stated that the SEC has adequately alleged that the crypto assets traded on Kraken qualify as unregistered securities, suggesting that the appeal would only prolong the resolution of the case. Kraken had sought an interlocutory appeal on the grounds of substantial legal questions regarding what constitutes an investment contract under securities laws. However, Judge Orrick noted that Kraken had not provided a recent legal precedent to support its arguments. The SEC, which sued Kraken in November 2023 for failing to register as an exchange among other violations, argued that existing laws clearly define investment contracts and asserted that Kraken's defenses would lead to irrelevant discovery processes. The judge's ruling reinforces the SEC’s position on the regulatory scrutiny of crypto exchanges.

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