Key points to remember
- The SEC is forcing Kraken to shut down its staking services in the United States, claiming the platform failed to properly register the program.
- SEC Commissioner Hester Peirce disagrees with the decision.
- She argued that Kraken could not have registered its products with the SEC even if it wanted to.
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SEC Chairman Gary Gensler’s latest move forcing Kraken to shut down its staking services is the subject of criticism from the agency itself.
The SEC is to blame
Not everyone at the SEC is happy with the agency’s recent decision against Kraken.
Commissioner Hester Peirce published a letter yesterday in which she criticized the Securities and Exchange Commission’s decision to shut down the crypto exchange’s staking products. The American regulator had announced earlier in the day, he reached a settlement with Kraken in which the company agreed to discontinue its staking services in the United States (and pay a $30 million fine) for failing to properly register the program.
Peirce argued that Kraken could not have registered his staking products even if he wanted to. “In the current climate, crypto-related offerings don’t go through the SEC’s registration pipeline,” she said, alluding to the difficulties crypto companies face in getting clear regulatory frameworks from the part of the SEC.
“We have known about crypto-staking programs for a long time,” she wrote. “Instead of taking the thoughtful route through staking programs and posting tips, we again chose to speak through enforcement action.” SEC Chairman Gary Gensler has been repeatedly criticized by industry executives and lawmakers for his “regulation by enforcement” approach, along with Congressman Tom Emmer going so far as to call it is a strategy to “entangle (crypto firms) in a breach”.
Peirce also claimed that the regulation did little to provide clarity to other staking-as-a-service providers, as the product itself raised a “plethora of complicated (regulatory) issues.” She added that many companies have adopted different business models. “Staking services are not one-size-fits-all, so one-off enforcement actions and cookie-cutter analysis are not (sic) enough,” she wrote, before outlining the company’s approach. SEC as “paternalistic and lazy”.
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other crypto assets.