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Kraken Fined $30 Million by SEC, will Halt Staking for U.S. Customers

By ZeroRequiem | Zero Ex | 10 Feb 2023


Hey Peeps!

 

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On February 9th, Kraken announced, via their blog, that they have agreed to a settlement with the U.S. Securities and Exchange Commission (SEC) regarding their Crypto Staking service. 

The settlement comes as a result of the SEC charging Kraken for the unregistered offer and sale of the Crypto Staking service.

To settle the charges, Kraken agreed to "immediately cease offering or selling securities through crypto asset staking services or staking programs and pay $30 million in disgorgement, prejudgment interest, and civil penalties". 

Kraken has agreed to settle the charges without admitting or denying the allegations.

 

It is important to note that this only applies to Kraken customers who reside in the United States, and Kraken states that "Non-U.S. clients can continue to stake and unstake assets, as well as automatically earn and stake rewards, as usual".

However for the U.S. customers, their assets will be automatically unstaked and they will be prevented from staking any further assets. 

 

Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws. Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.

Gary Gensler, SEC Chair

 

Here is a tweet from good old Gary talking about the Kraken charges....the video is truly quite something to behold:

 

In case after case, we’ve seen the consequences when individuals and businesses tout and offer crypto investments outside of the protections provided by the federal securities laws: investors lack the disclosures they deserve and are harmed when they don’t receive them. Today, we take another step in protecting retail investors by shutting down this unregistered crypto staking program, through which Kraken not only offered investors outsized returns untethered to any economic realities, but also retained the right to pay them no returns at all. All the while, it provided them zero insight into, among other things, its financial condition and whether it even had the means of paying the marketed returns in the first place.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement 

 

Since the collapse of FTX, regulators are clearly increasing the pressure on all the crypto platforms and services in the United States. 

One can only imagine that there are future charges, against other exchanges and platforms, coming in the future.

 

What is your reactions to this news?

Are you concerned about the United States' recent focus on Crypto regulation?

 

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See ya!

:)

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ZeroRequiem
ZeroRequiem Verified Member

Writer ✍️ Crypto • Finance • Gaming • Politics 🟢 Follow me: https://linktr.ee/zerorequiem0x


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