News

In a striking turn of events, Kraken, a leading cryptocurrency exchange, has officially filed to dismiss a lawsuit brought against it by the U.S. Securities and Exchange Commission (SEC). The lawsuit, which surfaced last November, accuses Kraken of operating without proper registration as an exchange, broker, and clearinghouse. Kraken’s defense? A compelling argument that the cryptocurrencies in question should be considered commodities, not securities.

Kraken’s motion to dismiss the case, lodged in the Northern District of California, boldly disputes the SEC’s claims. The exchange argues that it has been transparently conducting its business for nearly a decade, without any allegations of fraud or consumer harm from the SEC. Instead, the commission’s concerns solely revolve around the exchange’s alleged failure to register according to the Exchange Act.

Delving deeper into the legal battle, Kraken draws parallels between cryptocurrencies and other collectibles like comic books or baseball cards, suggesting that while these items can be seen as investments, they do not qualify as investment contracts under the law. Furthermore, Kraken points out that the SEC’s complaint lacks a solid foundation, as it does not meet the criteria of the Howey Test, a Supreme Court precedent essential for identifying securities.

Amidst these arguments, Kraken also accuses the SEC of overstepping its boundaries, citing the Major Questions Doctrine. This legal challenge raises significant questions about the extent of the SEC’s jurisdiction over cryptocurrencies and blockchain technology.

While Kraken has chosen not to comment on the SEC’s allegations of commingling customer and corporate funds, the exchange’s move to dismiss the lawsuit marks a pivotal moment in the ongoing dialogue around cryptocurrency regulation. As the case unfolds, the crypto community watches closely, anticipating the implications for the broader industry.

Bakkt, a prominent player in the crypto custody space, recently shared with the SEC that it’s navigating through liquidity challenges. This revelation underscores the volatility and uncertainty within the world of cryptocurrency, sparking discussions on the future of digital asset management.

Founded in 2018, Bakkt has been at the forefront of offering custodial services to both institutional and retail investors aiming to delve into the crypto market. Operating under stringent oversight from the New York State Department of Financial Services (NYDFS), Bakkt has established itself as a Qualified Custodian, emphasizing its commitment to compliance and security.

The company’s journey, however, has hit a snag as it explores new market territories. With ambitious expansion plans, Bakkt finds itself in a pivotal moment, assessing its financial runway and strategizing to ensure operational sustainability through 2025 and beyond.

Despite generating significant revenue, with a notable increase from $14 million in the second quarter of the previous year to $348 million in the same period in 2023, Bakkt acknowledges the need for additional capital to maintain its trajectory towards profitability and sustained growth.

This situation has not only put the spotlight on Bakkt’s strategic planning but also raised broader questions about the resilience of crypto custody providers in an ever-evolving financial landscape. As Bakkt strives to navigate through these challenges, the crypto community watches closely, eager to see how these developments will shape the future of blockchain finance.

ARK Invest Cashes Out on Coinbase Amid Analyst Optimism

In a surprising move, ARK Invest, under the leadership of Cathie Wood, parted with a substantial 499,149 shares of Coinbase Global (COIN), totaling approximately $90 million. This decision followed closely on the heels of Coinbase’s impressive fourth-quarter performance, which not only exceeded Wall Street’s expectations but also triggered a wave of optimistic upgrades from financial analysts.

Despite being a staunch supporter of Coinbase, ARK Invest made significant reductions in its holdings across several funds, including 397,924 shares from the ARK Innovation ETF (ARKK), 45,433 from the ARK Next Generation Internet ETF (ARKW), and 55,792 from the ARK Fintech Innovation ETF (ARKF).

The news of these sales comes as Coinbase’s stock enjoyed a notable surge, climbing nearly 27% to $180.31, buoyed by its stellar quarterly report. Financial circles buzzed with excitement as firms like KBW, Wedbush, Canaccord Genuity, and JMP Securities raised their price targets for Coinbase, signaling a bullish outlook on the crypto exchange’s future.

However, not all feedback was glowing. JPMorgan voiced concerns over Coinbase’s transparency regarding the impact of bitcoin ETFs on its operations. Similarly, Mizuho remained skeptical, maintaining its underperform rating with a $60 price target.

In a parallel development, ARK Invest also divested $6.72 million worth of shares in the trading platform Robinhood (HOOD), marking a significant shift in its investment strategy.

Unlocking the Potential of Hedera’s Blockchain

Step into the world of Hedera, an open source, public ledger that’s reshaping the blockchain landscape with its innovative hashgraph consensus. Unlike traditional blockchains, Hedera stands out with its fast, fair, and secure network, enabling a myriad of decentralized applications.

At its core, the Hedera network offers cutting-edge network services such as Solidity-based smart contracts, tokenization, and consensus services, all built on the revolutionary hashgraph consensus algorithm created by Dr. Leemon Baird. The Hedera network’s native cryptocurrency, HBAR, plays a pivotal role in network operations and token economics.

Hedera’s hashgraph consensus is known for its efficiency, processing hundreds of thousands of transactions per second, and achieving consensus without the need for proof-of-work. It’s this innovative approach that allows every transaction to reach finality with 100% certainty.

Developers can leverage Hedera’s platform to create dynamic applications across a variety of use cases, from payments and decentralized finance (DeFi) to sustainable marketplaces and decentralized identity solutions. The Hedera Token Service facilitates the creation and management of tokens with low, predictable fees and real-time settlement.

The Hedera Governing Council offers a decentralized governance model with a diverse group of global organizations ensuring the network’s integrity and guiding its evolution. Hedera’s journey towards decentralization reflects a commitment to creating an empowered digital future for all.