Regulation comes for crypto staking: Law Decoded, Feb. 6–13
Last week, the United States Securities and Exchange Commission (SEC) reached an agreement with cryptocurrency exchange Kraken. The latter will stop offering crypto staking services to American customers and pay $30 million in disgorgement, prejudgment interest and civil penalties.
While the sum of fines could hardly get an entity like Kraken off balance, the future of staking concerns the crypto market. The court agreement attracted the ire of not only the general crypto community but of investors, politicians and industry executives, with Cinneamhain Ventures partner Adam Cochran calling SEC Chair Gary Gensler “an agent of an anti-crypto agenda” rather than a regulator. The CEO of the Blockchain Association, Kristin Smith, urged Congress to take such important cases under its direct control.
The CEO and co-founder of cryptocurrency exchange Coinbase, Brian Armstrong, believes that banning retail crypto staking in the United States would be a “terrible” move by the country’s regulators. Armstrong also criticized the current lack of regulatory clarity in the U.S. and subsequent “regulation by enforcement” that he says is driving companies offshore, such as FTX.
Even the SEC Commissioner Hester Peirce has publicly rebuked her agency over the shutdown of Kraken’s crypto staking program. The commissioner blasted her agency, arguing that regulation by enforcement “is not an efficient or fair way of regulating” an emerging industry. Peirce implied the regulator was “lazy and paternalistic,” suggesting the SEC should have initiated a “public process to develop a workable registration process that provides valuable information to investors.”
South Korea established guidance that specifies which digital assets will be considered
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