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SEC’s Crackdown on Kraken’s Staking Program Puts Other Players on Notice

On Thursday, Kraken agreed to shut down its cryptocurrency staking services in the US and pay a $30 million fine to settle charges against it by the U.S. Securities and Exchange Commission (SEC).

According to an announcement by the SEC, by its offering of a crypto staking-as-a-service program, the crypto exchange was allegedly offering unregistered securities products and thus contravening Securities Regulations.

SEC chair clarified that Kraken’s woes came about from its failure to disclose vital information to the investing public. Asked how the staking-as-a-service program differs from products such as Coinbase’s yield product, he noted that “it’s not about the labels; it’s about the underlying economics.” According to him, every US-based crypto firm had to abide by securities regulations as long as they were taking tokens from the public and depositing them in platforms that they control.

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