Feb 11, 2023

Crypto Community Outraged Over SEC Charges Against Kraken

The crypto community has been in an uproar over the recent charges brought against Kraken, a crypto exchange, for its staking-as-a-service program in the United States. On Feb. 9, the United States Securities Exchange Commission (SEC) announced that Kraken had failed to register the offer and sale of their crypto asset staking-as-a-service program, which is qualified as securities under its purview.

Kraken agreed to settle the charges by paying $30 million in fines and to immediately cease offering staking services to U.S. retail investors, though they will continue to be offered offshore.

The decision has been met with criticism from investors, politicians, and industry executives, including Adam Cochran, a partner at Cinneamhain Ventures and Ethereum bull, who called out SEC chief Gary Gensler. Kristin Smith, CEO of the Blockchain Association, argued that the situation is a textbook example of why Congress should be working with industry players to forge appropriate legislation.

U.S. Congressman Tom Emmer, a critic of Gary Gensler, highlighted the importance of staking in the crypto ecosystem and argued that the “purgatory strategy” will hurt “everyday Americans the most” as they may soon be forced to fetch such services offshore. Ryan Sean Adams, the founder of the Ethereum show Bankless, suggested that the SEC could have taken other measures rather than charging Kraken out of the blue.

Michael Saylor, a prominent Bitcoin bull, agreed with Gensler’s analysis that retail investors “lose control” of their tokens when they’re delegated to external staking service providers.

However, not all were against the SEC’s decision. Jake Chervinsky, attorney and chief policy officer of the Blockchain Association, noted that such “settlements are not law” and that Kraken’s decision to settle was likely an economic decision rather than a legal one.

The SEC’s charge towards enforcing action against staking service providers has caused Coinbase CEO Brian Armstrong to express that “regulation by enforcement” would be a “terrible path” for U.S. innovators, as they’ll be forced to push more of their services offshore.

The implications of the SEC’s enforcement on staking service providers has raised questions about the future of NFTs and the use of crypto for marketing and promotion. NFTs are a digital asset that is stored and traded on the blockchain, and they have become increasingly popular in recent years.

NFTs are becoming a popular tool for marketers and promoters, who are looking to leverage the technology to create unique and engaging experiences for their customers. With the SEC’s enforcement on staking services, marketers and promoters may have to look elsewhere for services to help them promote and market their NFTs.

Twitter is one of the most popular platforms for NFT marketing, and many marketers are turning to Twitter NFT marketing agencies to help them promote their NFTs. These agencies specialize in creating engaging campaigns that help to drive awareness and engagement around NFTs.

The SEC’s enforcement on staking service providers has also raised questions about the future of web3 agencies that help to promote and market NFTs. Web3 agencies specialize in helping to promote and market NFTs, and they provide a range of services from creating campaigns to helping to sell NFTs.

The SEC’s enforcement on staking service providers has caused a stir in the crypto community, and it remains to be seen what the implications will be for NFT marketers and promoters. It is clear, however, that the SEC’s enforcement has raised questions about the future of NFTs and the use of crypto for marketing and promotion.

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