Bitcoin and Ethereum Price Prediction: BTC and ETH Slide Amid Kraken Crackdown
The price of Bitcoin and Ethereum took a downward turn this week, sliding amid reports that Kraken has settled with the US Securities and Exchange Commission and will now not offer its staking-as-a-service product to companies without regulatory approval.
The outcome of Kraken's settlement with the Securities and Exchange Commission (SEC) has significant implications for the cryptocurrency industry. The SEC disclosed on Thursday that Kraken, a cryptocurrency exchange, will pay a $30 million fine for failing to register its cryptocurrency staking-as-a-service program's offering and sale.
Prior to this announcement, Coinbase CEO Brian Armstrong cautioned on Twitter that he had received information that "the SEC intends to eliminate crypto staking for retail customers in the United States."
At first glance, the news of Kraken's settlement with the SEC seemed like a negative development for all crypto-staking services. However, the market reaction suggests that only centralized exchanges as staking intermediaries, such as Kraken and Coinbase, have reason to worry. The governance tokens for Lido and Rocket Pool, two of the largest pooled staking services, surged up to 11% in the past day.
Staked assets play a critical role in proof-of-stake networks, such as Ethereum, by ensuring network stability. Retail-level investors who cannot become standalone Ethereum validators due to high entry barriers turn to staking-as-a-service and pooled staking providers.
Liquid staking, which enables tokenized and tradable staked assets, has grown to $12 billion, or 26%, of the $47 billion DeFi ecosystem. Lido, the largest protocol that supports ETH staking, accounts for $8 billion, or 75% of the funds deposited.
The SEC's complaint against Kraken
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