I had the same exception and command: wsl --set-default-version 2 returned message: An update to the WSL 2 kernel component is required. For information, visit the https://aka.ms/wsl2kernel website. (This is not original message, I've translated it from my native language.) When I've followed link and installed kernel update docker starts working.

I believe Docker is trying to run on Windows WSL framework/feature. Please make sure you've turned it on.

How to do that?

1. In windows search type - turn windows features on or off
2. Make sure you've the option - Windows subsystem for Linux selected there, if it isn't, select it and click okay.
3. It'll install WSL on your system & tell you to restart, after system restart your docker will run properly!
4. As a bonus, run powershell with administrative privileges & run this command wsl --set-default-version 2, this will make your system switch to latest version of WSL with added benefits.

If this answer helps, let me know, or I can go in further details.