Kraken Pays $30 Million Fine and Shuts Down Staking Service in SEC Settlement, the Crypto Mom Reacts

The crypto community has expressed outrage at Kraken’s $30 million settlement and its crypto staking option closure.

Kraken coming out of the dumbster.
  • Kraken has agreed to pay $30 million in fines and close its crypto-staking services as part of a settlement with the SEC.
  • The crypto community has been outraged by the report, calling out Gary Gensler for his anti-crypto agenda.
  • The crypto mom, Commissioner Hester Pierce, has blasted the SEC for its “lazy and paternalistic” approach towards regulating crypto.

Kraken, a U.S.-based cryptocurrency exchange, has been hit with $30 million in penalties and agreed to shut down its crypto staking program as part of the settlement with the Securities and Exchange Commission (SEC) for offering unregistered securities.

Kraken Reaches Settlement with the SEC

In a follow-up to the SEC’s probe of Kraken, the regulator has fined the cryptocurrency exchange $30 million in disgorgement, prejudgment interest, and civil penalties.

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The SEC announced in a press release that as part of the settlement, Kraken would shut down its cryptocurrency staking program that it had been offering its customers since 2019.

The news follows concerns raised by Coinbase’s CEO Brain Armstrong about the regulator’s plans to ban crypto staking for retail traders in the United States. SEC Chairman Gary Gensler had previously said staking could be classified as securities.

Just after the announcement, Gensler tweeted:

Crypto Community Calls Out Anti-Crypto Agenda

The settlement news has sparked outrage in the crypto community, who called out Gensler’s seeming detestation of crypto. Popular investor and Cinneamhain Ventures partner, Adam Cochran, has called out Genler’s anti-crypto agenda, tweeting:

Ryan Sean Adams, the founder of the Ethereum show Bankless, noted that the SEC could have taken other measures rather than charging Kraken. U.S. Congressman Tom Emmer agrees, saying Genler’s “purgatory strategy” will hurt “everyday Americans the most.”

Kraken Down, Commissioner Hester Pierce Slams the SEC

Crypto users are not the only ones at loggerheads with the SEC’s decision. The commissioner of the regulator, Hester Pierce, said regulation by enforcement “is not an efficient or fair way of regulating.”

According to Pierce, the SEC has remained “lazy and paternalistic” towards regulating cryptos. While the regulator counts the settlement as a win for investors, she disagrees and “therefore dissent.”

In the release where she shared her thoughts on the situation, Commissioner Pierce explained that the SEC could have  initiated a “public process to develop a workable registration process that provides valuable information to investors.”

On the Flipside

  • Not all big players in the crypto industry are against Gensler’s decision, with Michael Saylor being one of the most prominent figures in agreement.
  • The Bitcoin permabull agreed with Gensler’s analysis that retail investors “lose control” of their tokens if they are held with staking services.

Why You Should Care

The settlement may mean the SEC could go after other exchanges and platforms offering crypto-staking services, as it sees them as securities.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

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Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia