Feb 11, 2023
SEC Commissioner Blasts Agency Over Crypto Staking Shutdown
The United States Securities and Exchange Commission (SEC) recently announced a $30 million settlement with crypto exchange Kraken over their crypto staking program. This move has drawn criticism from the SEC’s own Commissioner Hester Peirce, who has publicly rebuked the agency for shutting down the program.
In a statement titled “Kraken Down”, Peirce argued that regulation by enforcement is not the most efficient or fair way to regulate an emerging industry such as crypto. She further stated that the SEC’s decision to shut down a program that has been serving people well is lazy and paternalistic.
The commissioner suggested that rather than using enforcement actions to tell people what the law is, the SEC should have opted for a public process to develop a workable registration process that would provide valuable information to investors.
Her comments were echoed by Coinbase CEO and co-founder Brian Armstrong, who argued that requiring businesses to register their staking services is a “disingenuous offer” as there is no clear path to registration.
The settlement with Kraken is similar to the SEC probe that Coinbase is currently facing, which is related to its staking services. As part of the settlement, Kraken is permanently banned from providing staking services to U.S. residents, even if they seek to register it with the regulator.
Peirce, also known as the SEC’s “Crypto Mom”, has been an advocate for the crypto industry during her time at the regulator. She has proposed a “safe harbor” for token projects which are looking to build decentralized networks, in which the network developers would receive a three-year grace period where they were exempt from SEC legal action.
The commissioner’s proposal is an important step towards introducing a more favorable regulatory framework for the crypto industry. It could also provide a much-needed boost to the NFT market, as it would open up opportunities for NFT promotion, NFT marketing, and even selling NFTs.
NFTs have been gaining traction in recent months, and the industry is now in need of a reliable marketing agency that can help promote NFTs on social media platforms like Twitter. A web3 agency could provide the necessary guidance and expertise to help NFT creators reach a wider audience.
In conclusion, the SEC’s decision to shut down Kraken’s crypto staking program has been met with criticism from within the agency. Commissioner Hester Peirce has suggested that the regulator should focus on developing a workable registration process that provides valuable information to investors. This could be a major step forward for the crypto industry and could help promote NFTs and other web3 technologies.
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