Yesterday, the Securities and Exchange Commission announced its enforcement action against Kraken, forcing the crypto exchange to shut down its staking service in the U.S. and pay a $30 million fine.
Kraken’s staking service offered its customers an opportunity to earn rewards by depositing their crypto into various yield-generating protocols, advertising up to 24% yearly returns.
The SEC’s complaint alleged that Kraken had failed to register its staking-as-a-service with the regulator.
The Commission’s decision was not unanimous, however.
Commissioner Hester Peirce, known in the industry as “Crypto Mom,” shared her dissent yesterday to the SEC’s crackdown, calling such actions “not an efficient or fair way of regulating” an emerging industry.
She said, citing Gensler, that the SEC “again chose to speak through an enforcement action, purporting to ‘make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.’”
Peirce also noted that the SEC’s action against Kraken enjoins it from “ever offering a staking service in the United States, registered or not.”
Kraken has yet to respond to Decrypt’s request for comment.
What’s at stake for other exchanges?
While Kraken’s U.S. staking service is likely shuttered for good, it is still unclear whether other American companies will be affected.
Hours before the SEC released its press release on the settlement with Kraken, Coinbase CEO Brian Armstrong cited rumors pertaining to the crackdown.
Armstrong tweeted that he was hearing “rumors” that the SEC wanted to ban staking services for retail investors in the U.S.
1/ We’re hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that’s not the case as I believe it would be a terrible path for the U.S.
