{"id":615,"date":"2023-02-10T13:02:39","date_gmt":"2023-02-10T18:02:39","guid":{"rendered":"https:\/\/embarrdowns.com\/kraken-agrees-to-pay-30-million-in-sec-settlement-crypto-markets-tumble\/"},"modified":"2023-02-10T13:02:40","modified_gmt":"2023-02-10T18:02:40","slug":"kraken-agrees-to-pay-30-million-in-sec-settlement-crypto-markets-tumble","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/kraken-agrees-to-pay-30-million-in-sec-settlement-crypto-markets-tumble\/","title":{"rendered":"Kraken Agrees to Pay $30 Million in SEC Settlement, Crypto Markets Tumble"},"content":{"rendered":"

Kraken, an exchange for cryptocurrency based in the United States, has come to an agreement with the SEC to pay $30 million in restitution, interest, and fines for its involvement in the unregistered offering of staking services.[0]<\/a><\/sup> On February 9th, 2023, an announcement was made that Kraken’s U.S.-based staking program would be discontinued, along with other details of the settlement.[0]<\/a><\/sup><\/p>\n

Staking, which allows users to earn rewards by using their existing holdings of tokens to verify transactions, is a feature of proof-of-stake blockchains, such as Ethereum.[1]<\/a><\/sup> According to SEC Chair Gary Gensler, crypto intermediaries need to provide proper disclosures and safeguards when offering investment contracts, regardless if it’s through staking-as-a-service, lending or other means.[1]<\/a><\/sup> \u201cToday\u2019s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection,\u201d Gensler said.[2]<\/a><\/sup><\/p>\n

The news sent the cryptocurrency markets tumbling, with Bitcoin falling 3.7% in the past 24 hours to trade below $22,000 Friday, according to CoinMarketCap data, and Ethereum dropping 5.2% to hover above $1,500.[3]<\/a><\/sup> Shares of Coinbase (COIN) fell 4% following the news and Coinbase shares dropped 23% so far this week.[4]<\/a><\/sup><\/p>\n

Coinbase Chief Legal Officer Paul Grewal also weighed in on the news, claiming that Coinbase\u2019s staking program is not affected by the settlement.[5]<\/a><\/sup> \u201cWhat\u2019s clear from today\u2019s announcement is that Kraken was essentially offering a yield product,\u201d Grewal wrote in a statement shared with The Block.[6]<\/a><\/sup> \u201cCoinbase\u2019s staking services are fundamentally different and are not securities.\u201d[6]<\/a><\/sup><\/p>\n

Kraken stated in a blog post that it would still offer staking services to non-U.S. customers through a subsidiary, but according to the SEC announcement, the firm is permanently banned from providing staking services to U.S. residents, even if they sought to register it with the regulator.[0]<\/a><\/sup><\/p>\n

0. <\/span>“Kraken Winds Down Staking for US Investors, Pays $30 Million to Settle Unregistered Offering of Staking Services …” Bitcoin News, 9 Feb. 2023, https:\/\/news.bitcoin.com\/kraken-winds-down-staking-program-pays-30-million-to-settle-unregistered-offering-of-staking-services-case-with-sec<\/a><\/a><\/p>\n

1. <\/span>“Kraken settles with SEC for $30M over staking services” Axios, 9 Feb. 2023, https:\/\/www.axios.com\/2023\/02\/09\/kraken-staking-sec-settlement<\/a><\/a><\/p>\n

2. <\/span>“Kraken pays $30 million to settle SEC charges over staking program” Yahoo News, 9 Feb. 2023, https:\/\/news.yahoo.com\/kraken-pays-30-million-to-settle-sec-charges-over-staking-program-210709450.html<\/a><\/a><\/p>\n

3. <\/span>“Kraken to stop offering crypto ‘staking’ and pay $30m SEC penalty” Markets Insider, 10 Feb. 2023, https:\/\/markets.businessinsider.com\/news\/currencies\/what-is-crypto-staking-kraken-sec-settlement-penalty-gary-gensler-2023-2<\/a><\/a><\/p>\n

4. <\/span>“Bitcoin Price Plummets As Crypto Regulation Heats Up; Major Exchange Pays $30 Million SEC Settlement” Investor’s Business Daily, 10 Feb. 2023, https:\/\/www.investors.com\/news\/bitcoin-price-plummets-as-regulations-tighten-major-exchange-pays-sec-30-million<\/a><\/a><\/p>\n

5. <\/span>“Coinbase Drops Most Since July as SEC Cracks Down on Crypto Staking” Yahoo! Voices, 10 Feb. 2023, https:\/\/www.yahoo.com\/now\/coinbase-drops-most-since-july-221242910.html<\/a><\/a><\/p>\n

6. <\/span>“Community urges Coinbase to relist XRP as CEO fights for staking” Cointelegraph, 10 Feb. 2023, https:\/\/cointelegraph.com\/news\/community-urges-coinbase-to-relist-xrp-as-ceo-fights-for-staking<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Kraken, an exchange for cryptocurrency based in the United States, has come to an agreement with the SEC to pay $30 million in restitution, interest, and fines for its involvement in the unregistered offering of staking services.[0]<\/a><\/sup> On February 9th, 2023, an announcement was made that Kraken’s U.S.-based staking program would be discontinued, along with other details of the settlement.[0]<\/a><\/sup><\/p>\n

Staking, which allows users to earn rewards by using their existing holdings of tokens to verify transactions, is a feature of proof-of-stake blockchains, such as Ethereum.[1]<\/a><\/sup> According to SEC Chair Gary Gensler, crypto intermediaries need to provide proper disclosures and safeguards when offering investment contracts, regardless if it’s through staking-as-a-service, lending or other means.[1]<\/a><\/sup> \u201cToday\u2019s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection,\u201d Gensler said.[2]<\/a><\/sup><\/p>\n

The news sent the cryptocurrency markets tumbling, with Bitcoin falling 3.7% in the past 24 hours to trade below $22,000 Friday, according to CoinMarketCap data, and Ethereum dropping 5.2% to hover above $1,500.[3]<\/a><\/sup> Shares of Coinbase (COIN) fell 4% following the news and Coinbase shares dropped 23% so far this week.[4]<\/a><\/sup><\/p>\n

Coinbase Chief Legal Officer Paul Grewal also weighed in on the news, claiming that Coinbase\u2019s staking program is not affected by the settlement.[5]<\/a><\/sup> \u201cWhat\u2019s clear from today\u2019s announcement is that Kraken was essentially offering a yield product,\u201d Grewal wrote in a statement shared with The Block.[6]<\/a><\/sup> \u201cCoinbase\u2019s staking services are fundamentally different and are not securities.\u201d[6]<\/a><\/sup><\/p>\n

Kraken stated in a blog post that it would still offer staking services to non-U.S. customers through a subsidiary, but according to the SEC announcement, the firm is permanently banned from providing staking services to U.S. residents, even if they sought to register it with the regulator.[0]<\/a><\/sup><\/p>\n

0. <\/span>“Kraken Winds Down Staking for US Investors, Pays $30 Million to Settle Unregistered Offering of Staking Services …” Bitcoin News, 9 Feb. 2023, https:\/\/news.bitcoin.com\/kraken-winds-down-staking-program-pays-30-million-to-settle-unregistered-offering-of-staking-services-case-with-sec<\/a><\/a><\/p>\n

1. <\/span>“Kraken settles with SEC for $30M over staking services” Axios, 9 Feb. 2023, https:\/\/www.axios.com\/2023\/02\/09\/kraken-staking-sec-settlement<\/a><\/a><\/p>\n

2. <\/span>“Kraken pays $30 million to settle SEC charges over staking program” Yahoo News, 9 Feb. 2023, https:\/\/news.yahoo.com\/kraken-pays-30-million-to-settle-sec-charges-over-staking-program-210709450.html<\/a><\/a><\/p>\n

3. <\/span>“Kraken to stop offering crypto ‘staking’ and pay $30m SEC penalty” Markets Insider, 10 Feb. 2023, https:\/\/markets.businessinsider.com\/news\/currencies\/what-is-crypto-staking-kraken-sec-settlement-penalty-gary-gensler-2023-2<\/a><\/a><\/p>\n

4. <\/span>“Bitcoin Price Plummets As Crypto Regulation Heats Up; Major Exchange Pays $30 Million SEC Settlement” Investor’s Business Daily, 10 Feb. 2023, https:\/\/www.investors.com\/news\/bitcoin-price-plummets-as-regulations-tighten-major-exchange-pays-sec-30-million<\/a><\/a><\/p>\n

5. <\/span>“Coinbase Drops Most Since July as SEC Cracks Down on Crypto Staking” Yahoo! Voices, 10 Feb. 2023, https:\/\/www.yahoo.com\/now\/coinbase-drops-most-since-july-221242910.html<\/a><\/a><\/p>\n

6. <\/span>“Community urges Coinbase to relist XRP as CEO fights for staking” Cointelegraph, 10 Feb. 2023, https:\/\/cointelegraph.com\/news\/community-urges-coinbase-to-relist-xrp-as-ceo-fights-for-staking<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":614,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/615"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=615"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/615\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/614"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}