Cryptocurrency

SEC under fire for regulation by enforcement in Kraken staking action

The SEC has launched a post-mortem investigation into Kraken’s staking enforcement.

On February 9, Kraken announced it would be discontinuing its staking service in the United States, revealing it would pay a $30 million fine to settle allegations that it failed to register its staking service as a security service. .

SEC Commissioner Pierce Participates

crypto friendly SEC Commissioner Pierce issued a statement saying it disagreed with the regulator’s view that the move was a “win for investors.”

The Commissioner wondered if it would even be possible to register securities staking products with the SEC. Told.

“Whether the entire staking program is registered or each token’s staking program is registered individually, what are the key disclosures, and what are the accounting implications for Kraken?”

Furthermore, Commissioner Pierce said that using enforcement action to enact legislation “is not an efficient or fair method of regulation” and denounced the agency’s regulation through an enforcement approach. I pointed out that the “canned” approach is not correct given that there are many variations of .

What will happen to staking in the US?

Input Output CEO Charles Hoskinson Confirming Commissioner Pierce’s remarks, he said:

“There is no standard definition of what delegation, staking, liquidity and custodianship really mean.”

He also mentioned that while Tezos, Cardano, Ethereum, Avalanche, etc. are all “staking systems,” the staking mechanics are very different. Then treating them the same leads to “regulation overhit”.

“Some are storable and non-fluid, some are liquid and non-storable. Some include binding or severing mechanisms. does not include.”

Nevertheless, for now, decentralized services are expected to benefit greatly from the SEC crackdown.

Henry Elderthe head of decentralized finance at Wave Financial called the clampdown a gift to DeFi staking protocols such as Lido, Rocket Pool and StakeWise.

“Their competitive advantage is an innate resistance to regulatory action that would have been of little concern without such action.”

Similarly, Columbia Business School professor Austin Campbell agreed with that view, saying those who want to invest at least have a DeFi option. He predicts a surge in DeFi staking activity in the near term.

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