SEC Commissioner Dissents With Kraken’s Staking Program Shutdown

• On February 9, the Securities Exchange Commission (SEC) reached a settlement with Kraken and its subsidiaries Payward Ventures and Payward Trading.
• SEC Commissioner Hester M. Pierce expressed disagreement with the decision to close Kraken’s staking program, arguing it should have been registered as a security offering.
• Commissioner Pierce called the SEC’s solution of shutting down programs without providing guidance “paternalistic and lazy regulation.”

Kraken Settles With SEC Over Staking Program

The Securities Exchange Commission (SEC) recently settled with crypto exchange Kraken and its subsidiaries Payward Ventures and Payward Trading on February 9th. The staking program offered by the exchange was part of this settlement, however, not everyone was pleased with this outcome.

Commissioner Disagrees With Settlement

SEC Commissioner Hester M. Pierce disagreed with the closure of Kraken’s staking program as part of the settlement, stating that it should have been registered by the SEC as a securities offering. She argued that using enforcement actions to inform people what the law is in an emerging industry is “not an efficient or fair way to regulate.” She further criticized the SEC for not providing guidance on this issue before it had become a problem, calling their solution “paternalistic and lazy regulation.”

Staking Programs A Complicated Question

Pierce stated that offerings like Kraken’s staking service raises a host of complicated questions including whether each token’s staking program would need to be separately registered and what disclosures would be necessary among other things. This has left many crypto investors in limbo when it comes to understanding how these services fit into existing regulations.

Kraken Forbidden From Offering Staking Service In US

As part of their settlement with the SEC, Kraken is forbidden from ever offering a staking service in the United States again—registered or not. This has raised concerns over what kind of solutions regulators are providing for those investing in crypto assets within America.

Regulators Need To Provide Solutions Not Shut Down Programs

Commissioner Pierce believes that rather than shutting down programs without providing solutions for investors, regulators should take time to think through these issues before making any decisions about them–especially in such an emerging industry like cryptocurrency where guidance can often be hard to come by for those who need it most..