Kraken Stops Crypto Staking Service in the US


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Kraken Stops Crypto Staking Service in the US

The United States Securities and Exchange Commission (SEC) has announced that it has reached a settlement with Kraken, in which Kraken has agreed to pay a settlement of $30 million and cease promoting or selling securities by use of crypto staking services or staking programs.

All customers based in the United States will have their participation in this program terminated without their knowledge, and their assets will no longer be eligible for awards. This applies to all assets that have been staked, with the exception of ether that has been staked (ETH). Following the Shanghai update, any ETH that has been staked will no longer be eligible for rewards; nevertheless, awards will continue to be earned while the ETH is kept.

According to the Securities and Exchange Commission (SEC), Kraken promoted and sold the crypto asset staking-as-a-service product despite the company not being registered to do so. Although a distinct Kraken business will be established in order to handle the stakes for customers located outside the US.

“Whether it’s through staking-as-a-service, lending, or any other means, crypto intermediaries need to provide the proper disclosures and safeguards required by our securities laws when offering investment contracts in exchange for investors’ tokens,” said Gary Gensler, the chair of the SEC. “This applies whether it’s through staking-as-a-service, lending, or any other means.”

The final payments will be made by Kraken on a prorated basis up to February 9th. Instead, Kraken will disburse benefits in their original, non-staked form. This will prevent these payments from being converted into stakes.

Despite this, SEC Commissioner Hester Pierce voiced her disapproval of the commission’s actions. She said that “today the SEC shut down Kraken’s staking program and celebrated it as a success for investors.” She was referring to the fact that the SEC had taken this action. I do not agree, and for that reason I object.”

She said that the Securities and Exchange Commission (SEC) ought to have initiated a “public effort to design a feasible registration procedure that gives meaningful information to investors.”

Compiled by Coinbold

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