SEC fines Kraken 30 million USD and bans staking services forever

The latest move from the SEC against crypto exchange Kraken signals a crypto crackdown in the near term.

SEC fines Kraken 30 million USD and bans staking services forever

According to a press release at dawn on February 10 (Vietnam time), the United States Securities and Exchange Commission (SEC) ordered the Kraken exchange to pay a fine of 30 million USD and force to stop providing staking services permanently. in the US market.

Specifically, the SEC charged Kraken with not registering to offer and sell a cryptocurrency staking product as a security contract. Kraken then did not admit or deny the allegations from the SEC and agreed to stop the staking feature as well as pay a civil penalty of 30 million USD with interest. But the exchange continues to open this service to non-US users through its subsidiary.

The regulator says that Kraken has been offering its staking service to the public since 2019. At that time, users could deposit crypto into the program with interest up to 21%.

Gurbir Grewal – Director of the SEC Enforcement Division further emphasized that during the past time, the exchange has not produced any documents proving its financial position, raising the question of whether Kraken is eligible to pay the profits. profit for investors from the beginning or not.

SEC Chairman Gensler spoke about the case, citing the recent wave of bankruptcy:

“If a platform goes down, investors will line up in bankruptcy court. That is why it is imperative that these companies and platforms comply with securities laws.”

News of the fine followed officials from the Internal Revenue Service petitioning the Northern District Court of California to issue a summons to collect information on Kraken users. According to court filings dated February 3, the exchange did not respond to a similar summons issued in May 2021.

At that time, the platform was required to provide information about users who had traded cryptos worth from $20,000 between 2016-2020, but Kraken did not comply and submitted documents, records and documents. other data for the agency.

Back in September 2022, SEC Chairman Gary Gensler has “recognized” that staking is a type of security, therefore must register with this agency to be able to operate and provide services to US investors. Coincidentally, yesterday the CEO of Coinbase posted a series of “rumored” articles that SEC is about to ban crypto staking.

But although today’s order does not affect Coinbase’s staking program, the exchange’s shares still closed the session down more than 14%.

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