• The SEC has reached an agreement with Kraken to shut down their crypto staking service for US customers and pay $30 million to settle Securities and Exchange Commission (SEC) charges.
• Kraken’s staking service offered a 20% APY, promising to send customers staking rewards twice per week.
• This settlement comes after Coinbase CEO Brian Armstrong’s speech emphasizing the importance of self-regulation and working with government regulators in the space.
Kraken Agrees to Shutter US Crypto-Staking Operations
The U.S. Securities and Exchange Commission (SEC) has announced that cryptocurrency exchange Kraken will „immediately“ end its crypto staking-as-a-service platform for U.S. customers and pay $30 million to settle charges related to offering unregistered securities.
Details of the SEC Settlement
The SEC voted on the settlement during a closed-door commissioner meeting on Thursday afternoon, confirming that Kraken would shut down its staking services for U.S. customers as part of the resolution. This includes a crypto lending product offering up to 24% yield which is also expected to be shut down under the settlement agreement.
This settlement follows Coinbase CEO Brian Armstrong’s speech earlier this week emphasizing the importance of self-regulation and working with government regulators in the space rather than fighting against them like many other exchanges have done in recent years. It also comes after reports that Kraken was close to reaching a settlement with the SEC over offering unregistered securities on Wednesday evening prior to Thursday’s announcement by the agency.
Implications of Settlement
The news underscores how seriously authorities are taking potential violations within cryptocurrency markets, particularly when it comes to offering unregistered securities or operating without proper oversight or licensing requirements from financial regulators such as the SEC in America or FINMA in Switzerland. It also highlights how exchanges can still remain competitive while being compliant with existing regulations by engaging proactively with government agencies rather than working against them which could lead to further penalties or sanctions if found guilty of any wrongdoing or violation under applicable laws or regulations governing digital assets markets worldwide.
Overall, this latest settlement between Kraken and the SEC serves as an important reminder for exchanges around the world: compliance matters! Taking proactive steps towards regulatory compliance may seem daunting at first, but it ultimately pays off in terms of customer trust and overall market innovation since companies can operate without fear of running afoul of any laws or regulations associated with digital asset transactions globally