Kraken Agrees to Shutter US Crypto-Staking Operations to Settle SEC Charges
• Kraken has agreed to shutter its US crypto-staking operations and pay $30 million to settle SEC charges that it offered unregistered securities.
• The SEC voted on the settlement during a closed-door commissioner meeting on Thursday afternoon, and an announcement may come later in the day.
• Kraken’s staking service offered a 20% APY, promising to send customers staking rewards twice per week, according to its website.
Kraken Agrees to Shutter US Crypto-Staking Operations
Kraken exchange has agreed to shut down its cryptocurrency-staking services for U.S. customers in order to settle charges with the Securities and Exchange Commission (SEC). The SEC confirmed this decision after a closed-door commissioner meeting on Thursday afternoon and announced they will be collecting $30 million from Kraken as part of the settlement.
SEC Charges Against Kraken
The SEC claims that Kraken offered unregistered securities through its crypto staking product, which promised up to 24% yield via lending activities. Additionally, their website advertised a 20% annual percentage yield for customers through their staking rewards program which would provide two payments per week.
Implications For Crypto Regulation
This news brings attention to how exchanges are handling security tokens which could have implications for wider crypto regulation moving forward. As more companies offer services related to digital assets, regulators may need to step in with further guidance or restrictions on how these products can be used by consumers.
Coinbase CEO Comments On Settlement
Coinbase CEO Brian Armstrong commented on the settlement saying „It’s good that this is now being resolved“ and added “I do think it’s important though that we all work together as an industry – exchanges, projects, regulators – so we can create an environment where innovation can thrive while also protecting investors” indicating his support of regulations around cryptocurrency products like those offered by Kraken.
This case is indicative of how companies should take caution when offering any sort of cryptocurrency related products or services in order avoid similar legal repercussions from authorities such as the SEC moving forward. It also highlights the importance of following regulations surrounding digital asset offerings and ensuring consumer protection measures are in place when engaging with potential investors or customers