Kraken will stop providing staking services in the US
The decision was made against the background of the SEC investigation into the exchange
10.02.2023 - 07:15
332
2 min
0
Kraken has agreed to shut its cryptocurrency-staking operations to settle charges with the U.S. Securities and Exchange Commission (SEC), according to an industry source briefed on the matter.
The SEC voted on the settlement during a closed-door commissioner meeting on Thursday afternoon, and an announcement may come later in the day, the industry person told CoinDesk.
A Kraken spokesperson declined to comment. An SEC spokesperson declined to comment after the publication of this article.
The SEC confirmed Kraken would shut down its staking services for U.S. customers after the publication of this article.
Kraken offers a number of services under its staking umbrella, including a crypto-lending product offering up to 24% yield. This is also expected to shut down under the settlement, the industry person said.
Kraken’s staking service offered a 20% APY, promising to send customers staking rewards twice per week, according to its website.
Bloomberg reported that Kraken was close to a settlement with the SEC over offering unregistered securities on Wednesday.
The vote comes a day after Coinbase CEO Brian Armstrong tweeted that he’d heard rumors the SEC would bar retail customers from engaging in staking, the technique of pledging crypto tokens to run blockchains such as Ethereum. The SEC declined to comment on Armstrong’s comments on Wednesday night. Coinbase offers its own staking services.
SEC Chair Gary Gensler has previously said he believes staking through intermediaries – like Kraken – may meet the requirements of the Howey Test, a decades-old U.S. Supreme Court case commonly used as one measure of whether something can be defined as a security under U.S. laws.
Staking looks similar to lending, Gensler said at the time. The SEC has brought and settled charges with lending companies before, such as now-bankrupt lender BlockFi.
A Kraken settlement would help Gensler’s mission, giving his agency a big win as it continues its efforts to police the broader crypto ecosystem. The majority of people staking on Ethereum, for example, use services, according to Dune Analytics.
Crypto markets fell after the publication of this article, with Ethereum, a coin secured by a proof-of-stake consensus mechanism, falling 4.5% within 30 minutes.
This material is taken from the website coindesk.com.
Useful material?
Market
The commission had previously warned the developer of potential enforcement actions
Apr 29, 2024
Market
Funds can be seized by law enforcers due to links to illegal activity
Apr 26, 2024
Market
Tether Finance division will be responsible for the issuance and redemption of USDT stablecoins
Apr 18, 2024
Trends
The first project introduced on the platform will be BounceBit (BB)
Apr 18, 2024
Business
The rate exchange of the native ACH token reacted with a 10% increase
Apr 18, 2024
Market
Miners are hunting for the first block after halving as the value of the first satoshi could exceed $1 million
Apr 18, 2024