As announced at the end of 2022, the SEC is letting nothing go in the crypto space anymore. As proof, she has just stopped one of the flagship services of the Kraken crypto exchange. Here is what happened.
Kraken stops staking, with a $30 million fine to pay
The Securities and Exchange Commission announced on February 9 that it has filed a complaint against Kraken. The US regulator blames the constituent entities of the crypto exchange for illegally offering crypto staking services. The entities in question are Payward Ventures, Inc. and Payward Trading Ltd. It appears that Kraken offers staking to the general public since 2019, without having registered their program beforehand. In this context, the SEC asked the crypto exchange to immediately stop staking the cryptos of its users.
Kraken has been quite cooperative, agreeing to stop offering and selling securities via crypto staking without delay. The crypto exchange that is ending its staking program must also pay $30 million in penalties. However, at no time did Payward Ventures and Payward Trading admit or deny the SEC accusations. Even so, Kraken agreed to final judgment to permanently bar him from violations of the Securities Act of 1933.
SEC leaders warn crypto firms
Gary Gensler has indicated that it is no longer a question of allowing crypto businesses to offer services without prior registration. Indeed, the Chairman of the SEC said : “Whether through staking, loans or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, must provide the appropriate information and guarantees required by our laws. on securities“.
Gurbir S. Grewal, director of the SEC’s Enforcement Division, also made statements. He asserted: “Case after case, we’ve seen the consequences when individuals and companies tout and offer crypto investments outside of the protections provided by federal securities laws: Investors don’t get the disclosures they deserve and are harmed when they do not receive them“.
According to Gary Gensler, the Kraken case should put crypto businesses on notice against the lack of registration of their services. Crypto staking service providers must now ensure “register and provide full, fair and truthful disclosure and investor protection“.
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