After rumours that the SEC is out to ban crypto staking services in the U.S., popular exchange Kraken closed its staking services on February 9.
In a settlement with the U.S. Securities and Exchange Commission, Kraken has been forced to shut down all staking services in the U.S. and pay a $30 million fine.
According to the SEC, Kraken was offering unregistered securities.
Kraken suspends crypto staking services in the U.S.
After Coinbase’s Brian Armstrong warned crypto Twitter that cryptocurrency staking services were at risk, Kraken settled with the SEC to end its staking services immediately and pay a fine of $30 million. Kraken commented that staking services for non-U.S. users will continue uninterrupted.
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The SEC has been on the hunt for "unregistered" securities in the crypto industry in recent months. Coinbase, Binance and other major exchanges may be next in line.
Chairperson of the SEC Gary Gensler said:
Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair and truthful disclosure and investor protection.
In February the SEC announced that cryptocurrencies were going to be a priority for financial regulators in the U.S. According to the SEC, cryptocurrencies pose various risks to U.S. markets and retail investors.
Gary Gensler:
Whether it's through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors' tokens, [companies must] provide the proper disclosures and safeguards required by our securities laws.
According to anonymous sources, stablecoin developers Circle and Paxos will be served with Wells Notcies from the NYDFS (New York State Department of Financial Services) soon.
Paxos helped develop Binance’s BUSD stablecoin while Circle developed the popular USDC digital dollar stablecoin.