• Kraken, a crypto exchange recently settled with the Securities Exchange Commission (SEC) on February 9.
• SEC Commissioner Hester M. Pierce disagreed and dissented with the closure of Kraken’s staking program.
• Commissioner Pierce argued that SEC should have set guidance on the staking programs before cracking down on it.
Kraken Settles With The SEC
Kraken, its subsidiaries Payward Ventures and Payward Trading, recently settled with the Securities Exchange Commission (SEC) on February 9.
SEC Commissioner Dissents
However, SEC Commissioner Hester M. Pierce disagreed and dissented with the closure of Kraken’s staking program by arguing that this program should have been registered with the SEC as a securities offering. She suggested that the SEC should have set guidance on the staking programs “long before this situation cracked” instead of taking enforcement actions to inform people what law is in an emerging industry which she said is “not an efficient or fair way to regulate”. According to her, one-off enforcement actions and “cookie-cutter” analysis do not provide a solution for crypto investors in the US. She also stated that using enforcement actions to shut down an entire program without providing any solution is “paternalistic and lazy regulator” behavior.
Staking Program Shut Down
As a result of this settlement, Kraken’s staking program will no longer be available in the United States, registered or not, Kraken is forbidden by the SEC from ever offering a staking service in the U.S..
Questions Need Answering
The Commissioner raised questions such as whether or not registration would have been possible in current crypto-related climate; whether or not each token’s staking program would be separately registered; what important disclosures would be; what accounting implications would be for Kraken etc..
Conclusion
In conclusion, Commissioner Piers calls for a better solution than just shutting down services like these without proper guidelines being put into place first.