- The SEC has charged Kraken for the unregistered offer and sale of securities through its staking-as-a-service program.
- “Crypto intermediaries must provide the proper disclosures & safeguards required by our laws,” states Chairman Gary Gensler
- The SEC’s decision was met with uproar and derision on Twitter.
SEC Chairman Gary Gensler is once again in the news, this time for charging Kraken with failing to register the offer and sale of their crypto asset staking-as-a-service program. This refers to the Kraken program whereby investors transfer crypto assets to Kraken for staking in exchange for advertised annual investment returns of as much as 21 percent. Kraken has agreed to shutter its staking-as-a-service program, and will be paying $30 million in a settlement with the SEC.
“Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries must provide the proper disclosures & safeguards required by our laws,” emphasizes Gensler in his latest Twitter post. The post also features a 4-minute video wherein the SEC chairman educates his audience.
In the video, which is already widely mocked in the crypto space, Gensler explains what staking is and why it requires oversight.
When a company or platform offers you these kind of returns, whether they call their services lending, earns, rewards, APY or staking, that relationship should come with the protection of the federal securities laws. That means you the investor should receive important disclosures.
Predictably, the crypto community is not pleased. The comment section underneath the post is an onslaught of reproach and roasting, led by some very prominent crypto analysts and influencers. “This isn’t the W you think it is mate,” replied Guy Turner of Coin Bureau. “You are an Anti-American corrupt regulator. You should resign immediately!” retorted analyst Tony Edward. The popular XRP account that goes by the name XRPcryptowolf wrote:
This makes no sense because Kraken had to completely get rid of their staking service. Gary is destroying crypto innovation and as a result we’re going to fall behind other countries.
The community has even circulated a photoshopped image of Gensler in a clown costume. “Give it up for the clown himself Gary Gensler,” one account tweeted. Certain others have also called out the SEC chairman for his selective strikes, having ignored larger offenders such as FTX and Sam Bankman Fried.
However, Gensler is unfazed. And it is obvious through these repeated and audacious attacks that neither Gensler nor the SEC has any plans of backing down.