Feb 11, 2023

SEC Commissioner Blasts Agency Over Kraken Shutdown

Hester Peirce, a United States Securities and Exchange Commission (SEC) Commissioner, has publicly criticized her own agency over its decision to shut down crypto exchange Kraken’s crypto staking program in the United States.

In a Feb. 9 statement titled “Kraken Down,” Peirce argued that regulation by enforcement “is not an efficient or fair way of regulating” an emerging industry.

“Today, the SEC shut down Kraken’s staking program and counted it as a win for investors. I disagree and therefore dissent,” she wrote.

Peirce was critical of the regulator for shutting down a “program that has served people well,” and said that the SEC should have initiated a “public process to develop a workable registration process that provides valuable information to investors” rather than using enforcement actions to tell people what the law is in an emerging industry.

Coinbase CEO and co-founder Brian Armstrong agreed with Peirce’s comments in a Feb. 9 tweet, suggesting that requiring businesses to register its staking services is a “disingenuous offer” as there is no clear path to registration.

The SEC announced on Feb. 9 that it had reached a $30 million settlement with Kraken, saying it failed “to register the offer and sale of their crypto asset staking-as-a-service program.”

Kraken said in a Feb. 9 blog post that it would still offer staking services to non-U.S. customers through a subsidiary, but according to the SEC announcement, the firm is permanently banned from providing staking services to U.S. residents, even if they sought to register it with the regulator.

Peirce, also known as the SEC’s “Crypto Mom,” has been a strong 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 SEC’s decision to shut down Kraken’s staking program has brought attention to the need for more clarity around the regulation of NFTs and other crypto assets. As the industry continues to grow, the need for a clear regulatory framework becomes increasingly important.

NFTs have become popular in recent months, with many companies using them to promote their products and services. NFTs are also being used for digital art, gaming, music, and other creative projects.

With the rise of NFTs, there has been an increased need for NFT marketing and promotion. As such, many companies have begun to turn to specialized NFT marketing agencies to help them promote their NFTs on various platforms, such as Twitter.

These agencies specialize in helping companies create effective NFT marketing campaigns that reach the right audience and generate interest in their NFTs. They also help companies create strategies to maximize their returns when selling NFTs.

As the industry continues to grow, it is important for companies to understand the regulations surrounding NFTs and the need for a clear regulatory framework. With the help of specialized NFT marketing agencies, companies can ensure that they are compliant with the current regulations and can maximize their returns when selling NFTs.

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