Kraken had to quickly shut down its staking service last week under pressure from the US SEC. The US regulator has accused the exchange of offering its service without first registering it. He then forced him to immediately end his program. Now, during an interview on CNBC, the SEC Chairman explains the reasons for the regulator’s action.
Kraken has not complied with the basic agreement with the SEC!
According to recent remarks by Gary Gensler, the SEC had good reason to force Kraken to stop staking. Indeed, on February 10, the chairman of the SEC said during his interview on CNBC:Kraken said “I will give you a return of 4% to 21%”. But the problem is that they did not disclose to the investing public the risk to which they were exposed.“. In addition, the American regulator found that Kraken had no right to offer its service without having registered it.
Gensler pointed out that any crypto business must declare its services as securities with the SEC. The idea is to protect crypto investors in the United States from industry-related risks. The Chairman of the SEC added : “We’ve had a basic deal in the United States since the 1930s. You can take the risk you want“.
He explained that companies like Kraken have the right to offer investment services like staking, which they want. But, in return, they have the obligation to “provide complete, fair and truthful information“. Moreover, doing so reassures investors and puts them in a better position. “This is our basic agreement. They did not comply with this fundamental lawGensler said.
Gensler explained during the CNBC interview that all businesses must register, regardless of service. He stated : “Labels don’t matter. […] Whether you call it Lend, whether you call it Earn, whether you call it Yield, whether you offer what’s called an annual percentage yield (APY), it doesn’t matter“. “These other platforms should take notice and seek compliance, make appropriate disclosures and records, and so on.“, he added. But, later in the day, Kraken co-founder and CEO Jesse Powell took a swipe at Gensler. He scoffed at the fact that he presented the registration of crypto companies with the SEC as a very easy operation.
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