The U.S. Securities and Exchange Commission has secured a significant victory against cryptocurrency exchange Kraken.

Judge William Orrick has denied the exchange’s attempt to dismiss the regulator lawsuit.

Last July, Judge Analisa Torres delivered a win for enterprise blockchain company Ripple by recognizing the secondary sales of the XRP token as non-securities.

However, the ruling proved to be quite controversial. For instance, Judge Jed Rakoff declined to distinguish between primary and secondary market transactions.

Notably, Judge Orrick says that he aligns with the Ripple ruling. However, he has added that this is the first time that a court has dealt with a situation that involves the exchange of third-party tokens on secondary platforms. Judge Orrick supports the SEC’s argument that the secondary of crypto assets fully satisfies the Howey test.

“The meat of the SEC’s pleadings alleges that during their initial offerings and throughout subsequent transactions on Kraken, those assets were offered as, or sold as, investment contracts. This is an acceptable framing, and one that the SEC has repeatedly advanced in other cases,” the court ruling said.

Notably, Judge Orrick has also ruled that the regulator’s case does not violate the Major Questions Doctrine. He has noted that the cryptocurrency industry is too small to justify the need for invoking this doctrine.

It is worth mentioning that the crypto assets that were included by the SEC in its lawsuit against Kraken include Cardano (ADA), Solana (SOL), and other tokens.