The U.S. Securities and Exchange Commission (SEC) has moved to dismiss three key defenses raised by crypto exchange Kraken in an ongoing lawsuit. Filed in the Northern District Court of California, the SEC criticized Kraken's claims regarding the clarity of securities laws and the assertion that the exchange had not received fair notice of its alleged violations. The SEC also challenged Kraken's reliance on the major questions doctrine, which limits agency power without Congressional approval. The SEC's lawsuit, initiated in November 2023, accuses Kraken of functioning as an unregistered securities exchange, broker, dealer, and clearing agency, allegedly profiting unlawfully from crypto asset securities trading since at least September 2018. Kraken had previously sought to dismiss the case in August, but the court had rejected its major questions doctrine argument, highlighting the well-established definition of 'investment contract' under the Securities Exchange Act of 1934. The SEC's motion emphasizes the need to discard these defenses to preserve judicial resources and prevent repetitive litigation.

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