The U.S. Securities and Exchange Commission (SEC) announced in a press release on February 9 that it accused cryptocurrency exchange Kraken of providing staking services as “unregistered securities sales.” To this end, Kraken has agreed to pay a $30 million fine in exchange for a settlement and immediately cease offering cryptocurrency staking services to U.S. users.
It is worth noting that Kraken reached a settlement without “acknowledging” or “denying” the relevant allegations. It is also the first cryptocurrency company in the United States to be prosecuted by the SEC for providing staking services.
According to the US SEC, Kraken has provided staking services to the public since at least 2019, and claims to provide an annualized rate of return of up to 21%, thereby attracting investors to transfer valuable cryptocurrency assets to Kraken, and Kraken represents the investment At this time, investors also lose their asset ownership, which is tantamount to securities sales. In the future, registration procedures, risk disclosure and appropriate legal terms will also be required.
Kraken stated in a blog post that the exchange will automatically release the cryptocurrency pledged by U.S. customers, except that the ether pledge will be released after the Ethereum Shanghai upgrade. At the same time, Kraken’s U.S. customers will no longer be able to stake new assets (including Ether), and non-U.S. users will not be affected.
In a statement, SEC Chairman Gary Gensler pointed out that “whether through pledge services, lending or other means, cryptocurrency intermediaries must provide appropriate disclosures and legal requirements required by securities laws when offering investment contracts in exchange for investors’ tokens.” Safeguards.” He continued:
Today’s action demonstrates to the market that staking service providers must register with the authorities and provide full, fair and truthful disclosure and investor protections.
Cryptocurrency markets tumble
MICA Research, a cryptocurrency research team, said that this is the first enforcement action by the US SEC against cryptocurrency pledge services, and it also means that Coinbase and other businesses may not be able to continue to provide cryptocurrency pledge services, and future service content may also be greatly restricted. This severely affected investor confidence.
After the news came out, the cryptocurrency market fell in response. Bitcoin broke through $22,000 and hit $21,834 at press time, down 5.2% in the past 24 hours. Ethereum and Binance Coin (BNB) fell even more, falling 6.5% and 7% respectively % to $1,548, $305.86.
Cryptocurrency-related stocks also took a hit, with Coinbase (COIN ) down 14% in midday trading on Thursday, bitcoin miner Marathon Digital Holdings (MARA ) down 13% and major bitcoin acquirer MicroStrategy (MSTR ) down 10%.
Earlier, Coinbase CEO Brian Armstrong posted on Twitter that he had recently received rumors that the US SEC intends to ban retail investors from participating in cryptocurrency pledges. At that time, bitcoin had begun to slowly decline, falling from an earlier support level of just below $23,000 to about $22,500.