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SEC wins in killing Kraken’s major questions doctrine defense

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A U.S. District Court judge has rejected Kraken’s use of the “major questions doctrine” as a defense against the Securities and Exchange Commission (SEC), dealing a blow to the crypto exchange’s argument in an ongoing legal battle. The SEC sued Kraken in February 2023, alleging its staking-as-a-service program constituted an unregistered securities offering. Kraken sought to counter the charges by invoking the doctrine, which argues that regulatory agencies cannot decide on major policy issues without clear congressional authorization.

Judge Araceli Martínez-Olguín dismissed the argument, stating that Kraken’s use of the doctrine was “misplaced” and that the SEC’s actions did not meet the threshold of introducing a sweeping new regulatory framework. The judge clarified that the SEC is merely enforcing existing securities laws, which apply to Kraken’s staking program. This ruling bolsters the SEC’s case and sets a precedent for other enforcement actions against similar crypto programs.

Kraken has maintained that its staking program, which allows users to earn rewards for helping secure blockchain networks, does not qualify as a security. The exchange further argued that the SEC’s enforcement approach lacks transparency and violates the principles of fair notice. Despite the setback, Kraken CEO Dave Ripley reaffirmed the company’s commitment to fighting the charges and ensuring clarity for the industry.

This case highlights the intensifying regulatory scrutiny facing the crypto sector as the SEC continues its crackdown on what it deems unregistered securities offerings. With Kraken losing this key defense, other crypto firms offering staking services may now face increased pressure to comply with existing regulations or risk similar enforcement actions. The broader implications of the case could shape how U.S. regulators address innovation and oversight in the rapidly evolving digital asset space.

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7-Eleven South Korea to accept CBDC payments in national pilot program

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7-Eleven is set to participate in the testing phase of a central bank digital currency (CBDC) initiative, running from April to June. The retail giant’s involvement highlights the growing push for digital currency integration in everyday transactions.

The pilot program will assess the feasibility of CBDC payments at 7-Eleven stores, allowing customers to make purchases using the digital currency. The initiative is part of a broader effort to explore the real-world application of CBDCs in retail environments, potentially shaping future payment systems.

As central banks worldwide accelerate their digital currency research, private sector collaboration is seen as crucial for widespread adoption. If successful, 7-Eleven’s participation could pave the way for broader CBDC usage across retail and commercial sectors.

The outcome of the testing phase will provide valuable insights into consumer adoption, transaction efficiency, and potential regulatory considerations, influencing how CBDCs are integrated into mainstream financial systems.

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SEC and Gemini ask to pause lawsuit to explore ‘potential resolution’

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The U.S. Securities and Exchange Commission (SEC) and crypto exchange Gemini have agreed to pause legal proceedings as both sides explore a potential resolution to their ongoing lawsuit. The move signals a possible settlement in the high-profile case, which centers around Gemini’s now-defunct Earn program.

The SEC initially sued Gemini, alleging that the Earn program—designed to offer users yield on crypto deposits—operated as an unregistered securities offering. Gemini has pushed back against the claims, arguing that its operations complied with regulatory standards.

By pausing litigation, both parties may be looking for a compromise that could set a precedent for crypto lending products in the U.S. A settlement could also provide regulatory clarity for similar platforms navigating SEC scrutiny.

While the outcome remains uncertain, the crypto industry is closely watching the case, as its resolution could impact future enforcement actions and the broader regulatory approach toward digital asset lending services.

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GameStop finishes $1.5B raise to add Bitcoin to its balance sheet

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GameStop has successfully completed a debt offering, raising capital that may be used to acquire Bitcoin, signaling the company’s deeper foray into digital assets. The move aligns with its broader strategy to diversify beyond traditional retail operations and into emerging financial technologies.

While GameStop has not confirmed the exact allocation of the funds, market speculation suggests that a portion could be used to buy Bitcoin, following in the footsteps of companies like MicroStrategy. The potential investment would reinforce GameStop’s ongoing pivot toward blockchain and digital assets, an effort that began with its NFT marketplace and crypto-related initiatives.

Analysts see this development as part of a growing trend of corporations exploring Bitcoin as a reserve asset amid concerns over inflation and monetary policy. If GameStop proceeds with the acquisition, it could further validate Bitcoin’s role as a strategic investment for publicly traded companies.

The company’s board will ultimately decide how the newly raised capital is deployed. Investors and the broader crypto market are watching closely for any official announcements regarding GameStop’s Bitcoin strategy.

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