Feb 11, 2023
Crypto Community Outraged Over SEC’s Kraken Charges
The crypto space is abuzz with the recent charges brought against the crypto exchange Kraken by the United States Securities Exchange Commission (SEC) in relation to their staking-as-a-service program.
The SEC announced on Feb. 9 that Kraken had failed to register the offer and sale of their crypto asset staking-as-a-service program, which it claims is qualified as securities under its purview.
In response to the charges, Kraken has agreed to settle by paying $30 million in fines and immediately ceasing to offer staking services to U.S. retail investors, although they will continue to be offered offshore.
The news has not been well received by members of the crypto community, investors, politicians, and industry executives alike. Adam Cochran, Cinneamhain Ventures partner and Ethereum bull, expressed his outrage at the SEC chief Gary Gensler, calling him an “agent of an anti-crypto agenda” rather than a regulator and questioning why the same standards weren’t applied to Sam Bankman-Fried and FTX.
Kristin Smith, CEO of the Blockchain Association, also shared her view in a statement posted to Twitter, suggesting that this situation is a textbook example of why Congress should be working with industry players to forge appropriate legislation, rather than the SEC.
U.S. Congressman Tom Emmer, a long-time critic of Gary Gensler, highlighted the importance of staking in the crypto ecosystem, explaining that staking services are essential to “building the next generation of the internet” and that the “purgatory strategy” will hurt “everyday Americans the most” as they will be forced to seek services offshore.
Ryan Sean Adams, the founder of the Ethereum show Bankless, suggested to his Twitter followers that the SEC could have taken other measures rather than charging Kraken out of the blue, such as mandating proof-of-reserves, requiring staking transparency, and supporting decentralized staking.
Not all were against the SEC’s decision, however. Bitcoin bull Michael Saylor, who has long considered ETH and other proof-of-stake cryptocurrencies to be securities, agreed with Gensler’s analysis that retail investors “lose control” of their tokens when they’re delegated to external staking service providers.
Jake Chervinsky, attorney and chief policy officer of the Blockchain Association, also 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 action towards enforcing action against staking service providers has prompted Coinbase CEO Brian Armstrong to say 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 SEC’s charges against Kraken have shone a spotlight on the importance of staking services for the growth of the crypto and web3 space, as well as the need for clear and effective regulation.
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The SEC’s charges against Kraken have highlighted the importance of staking services for the growth of the crypto and web3 space, as well as the need for clear and effective regulation. As the crypto and NFT space continues to grow, so too does the need for effective marketing and promotion of these assets, and for those looking to maximize the potential of their NFTs, a web3 agency can be a great asset.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
