• The Securities Exchange Commission (SEC) and Kraken have recently settled a case regarding the crypto exchange’s staking program.
• SEC Commissioner Hester M. Pierce argued that this staking program should have been registered with the SEC as a securities offering.
• Commissioner Pierce believes that the SEC should have provided guidance on the staking programs instead of taking an enforcement action against Kraken.
SEC Settles Case Regarding Kraken’s Staking Program
Following the settlement reached by Kraken and its subsidiaries Payward Ventures and Payward Trading with the Securities Exchange Commission (SEC) on February 9, covered by Bitcoinist, Commissioner Hester M. Pierce stated in a report that she disagreed with and dissented with the closure of the crypto exchange’s staking program.
Staking Program Should Have Been Registered As A Security
The regulator argued that this staking program should have been registered with the SEC as a securities offering. SEC Commissioner Pierce, also known as “Crypto Mom,” argues whether or not registration would have been possible in the current crypto-related climate: An offering like the staking service at issue here raises a host of complicated questions, including whether the staking program as a whole would be registered or whether each token’s staking program would be separately registered, what the important disclosures would be, and what the accounting implications would be for Kraken.
Solution Or Poor Judgement By The SEC?
The Commissioner stated that the SEC has been aware of the staking programs for an extended period. Thus, she suggests the SEC should have set guidance on the staking programs “long before this situation cracked” rather than using enforcement actions to inform people what law is in an emerging industry . Most concerning is that our solution to a registration violation is to shut down entirely a program that has served people well according to Commissioner Piers which she calls “paternalistic and lazy regulator”.
Kraken Forbidden From Offering Stake Services In U.S.
Kraken’s staking program will no longer be available in United States registered or not since they are forbidden from ever offering such service again by SEC due to their recent settlement agreement.
Commissioner Calls For Guidance Instead Of Enforcement Actions
Commissioner Pierce states that one-off enforcement actions and “cookie-cutter” analysis do not provide solutions for crypto investors in US therefore she calls for more guidance from regulators rather than strict enforcement actions when dealing with these kinds of situations especially when it comes to emerging industries such as cryptocurrency market where new regulations are still being established and enforced today.