• On February 9th, Kraken and its subsidiaries reached a settlement with the Securities Exchange Commission (SEC) regarding their staking program.
• SEC Commissioner Hester M. Pierce dissented with the decision to close Kraken’s staking program, arguing that it should have been registered with the SEC as a securities offering.
• Commissioner Pierce believes that one-off enforcement actions are not an efficient or fair way to regulate in the emerging crypto industry.
Kraken Settles With The SEC
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
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.
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” instead of using enforcement actions to inform people what laws applied in an emerging industry. Most concerning to her is how “[our] solution to a registration violation is to shut down entirely a program that has served people well.” Kraken’s staking program will no longer be available in America due to this settlement agreement.
Commissioner Piers Weighs In
Commissioner Piers calls this recent settlement by the SEC “paternalistic and lazy regulator” behavior where they provide no solution but just shut it down instead of providing guidance or registering these services properly so they can continue operating legally in America.
Despite dissenting against closing down all operations within America due to lack of proper registration of services offered by Kraken, Commissioner Piers’ opinion was overruled by majority vote from other members within The Securities Exchange Commission leaving their customers without any legal ways to use their products within American borders anymore unless proper regulation is established for these types of offerings which could take some time given current circumstances surrounding cryptocurrencies