Kraken, one of the largest U.S.-based cryptocurrency exchanges, has agreed to pay $30 million to the U.S. SEC as part of a settlement for the unregistered offering of staking services.
Kraken Winds Down Staking Program, Pays $30 Million to Settle Unregistered Offering of Staking Services Case With SEC
Kraken, a U.S.-based cryptocurrency exchange, has agreed to wind down its cryptocurrency staking program as part of an arrangement with the U.S. Securities and Exchange Commission to settle for the unregistered offer of its staking services. The exchange will also pay $30 million in disgorgement, prejudgment interest, and civil penalties, as indicated by the regulator.Kraken, one of the largest U.S.
Gary Gensler, chair of the SEC, explained that virtual asset service providers need to exercise compliance when offering these investment tools to their customers. GenslerWhether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws.
Furthermore, Gensler declared that the action carried about by the SEC means that every staking as a service provider must now ‘register and provide full, fair, and truthful disclosure and investor protection.’ Gurbir S. Grewal, Director of the SEC’s division of enforcement, also criticized the action of Kraken’s staking program, stating it provided zero insight into the condition of the company to pay the marketed returns.
The decision of this case also implies that all of the staked crypto funds from customers will be automatically unstaked, with the exception of ether, which will have to wait until the Shanghai update. The staking rewards will be awarded on a prorated basis for February 9, as the exchange
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