A California judge has denied Kraken’s request for an interlocutory appeal, stating that allowing an appeal would only delay the resolution of the U.S. Securities and Exchange Commission’s (SEC) case against the crypto exchange. Kraken, the second-largest crypto exchange in the U.S., had filed a motion for an interlocutory appeal in September after Judge William Orrick ruled that the SEC had plausibly alleged that the cryptocurrencies sold on Kraken’s platform may be securities under the Howey Test.
In their September motion, Kraken’s lawyers argued that Orrick should grant them permission to appeal his decision with a higher court, claiming that there was a substantial ground for difference of opinion regarding a controlling question of law. However, Orrick rejected this argument in his ruling on Monday, emphasizing that allowing an appeal at this stage would only serve to delay the resolution of the case.
The SEC had sued Kraken in November for allegedly operating as an unregistered securities exchange, broker, dealer, and clearinghouse. The SEC requested disgorgement, civil penalties, and permanent injunctions against the crypto exchange. Despite Kraken’s denial of any wrongdoing and motion to dismiss the case, the motion was denied in August.
Orrick highlighted the importance of completing discovery in order to establish whether the sales, trades, and exchanges on Kraken truly met all the elements of the Howey Test. He stated that a complete record is necessary to answer these questions and that certification for an interlocutory appeal would only serve to delay the resolution of the litigation.
Overall, the judge’s decision to deny Kraken’s request for an interlocutory appeal underscores the need for a thorough examination of the facts through the discovery process to determine the outcome of the SEC’s case against the crypto exchange. This ruling emphasizes the importance of allowing the legal proceedings to move forward without unnecessary delays to ensure a fair and just resolution for all parties involved.
