• Kraken and its subsidiaries Payward Ventures and Payward Trading have recently settled with the Securities Exchange Commission (SEC) due to their staking program.
• SEC Commissioner Hester M. Pierce disagreed with the settlement, arguing that this staking program should have been registered with the SEC as a securities offering.
• Commissioner Pierce believes that instead of providing a solution, the SEC has chosen to shut down entirely a program that has served people well.
Kraken’s Staking Program Settlement 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, 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 As A Securities Offering
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 these programs “long before this situation cracked.” Instead of taking this path however, they chose to speak through an enforcement action instead of providing guidance – which is not an efficient or fair way to regulate according to Pierce. She adds most concerningly is that our solution to a registration violation is to shut down entirely a program that has served people well – leaving no other option for investors in U.S..
Kraken’s Staking Program No Longer Available In The U.S.
Kraken’s staking program will no longer be available in United States, registered or not – Kraken is forbidden bythe SEC from ever offeringa stakingservicein U.S..Commissioner Piers calls therecent settlement bytheSEC apaternalisticand lazy regulatorthatinsteadof providingasolution it just shutsit down
Conclusion
In conclusion Commissioner Piers believes that one-off enforcement actions and “cookie-cutter” analysis do not provide a solution for crypto investors in US; but rather than issuing clear guidance on how these programs work and how best to register them properly , they use enforcement actions which results in shutting down entirely any services related to cryptocurrencies without providing any real solutions .
