Kraken has asked the U.S. court to dismiss the SEC's lawsuit against it

Cryptocurrency exchange Kraken has asked a U.S. court to dismiss a lawsuit brought against it by the Securities Exchange Commission (SEC) in order to avoid a "major restructuring" of the U.S. financial regulatory structure, according to court documents filed by the Northern District of California on Thursday.
The Securities Exchange Commission originally sued Kraken in November last year, alleging it was not registered as a broker, clearing house or exchange. This comes months after reaching a settlement over allegations that Kraken had previously pledged services. Kraken's latest response to the SEC's motion to dismiss hinges on the extent to which one can interpret the SEC's jurisdiction by using the Howey test, which determines what is and is not a security.
Kraken's lawyers wrote that the Securities Exchange Commission could not satisfy Howey's additional requirements to invest funds in a common enterprise and make reasonable expectations of profits based on the efforts of others. That would greatly expand the SEC's jurisdiction over a range of investment activities never entrusted to the agency, and thus hit Howey hard. Such a significant restructuring of America's financial regulatory structure should be debated in Congress, not in the courts.