The SEC announced that Kraken had agreed to shutter its staking service, accusing it of selling unregistered securities. The SEC said in a news release that Kraken’s exchange, one of the most popular ones for cryptocurrency investors, failed to register “the offer and sale of their crypto asset staking-as-a-service program.”Staking is when users give exchanges crypto tokens — for example, Ethereum’s ether — in exchange for high yields.
Gensler said that the agency’s action against Kraken should “make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.” There were rumors earlier this week that the SEC would be cracking down on Kraken over its staking service. Coinbase CEO Brian Armstrong took to Twitter to hit at the plan before its announcement. He said he believes “it would be a terrible path for the U.S.” if the SEC were to get rid of crypto staking for retail investors.
The SEC also had dissent within its own ranks. SEC Commissioner Hester Peirce, the sole Republican on the commission, said in her dissent that she thinks there should have been guidance issued first rather than having the SEC speak through enforcement action.