SEC vs Kraken: A Look into the Staking Services Controversy

The SEC has announced charges against crypto exchange Kraken for offering unregistered securities products in the U.S. through its crypto staking-as-a-service program.

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Kraken is paying $30 million and shutting down all its U.S. staking services to settle the charges.

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The charges have raised questions about the future of staking in the U.S. and whether the SEC is targeting staking as a whole.

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Staking involves supporting the network by holding or "staking" crypto, as opposed to proof-of-work consensus mechanisms which secure the blockchain through computing power.

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Staking services are becoming more popular in the U.S. as a way for people to participate in proof-of-stake consensus mechanisms without having to run their own node.

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The SEC views the offering of a staking service as similar to offering any other type of security, meaning companies would have to register as a securities platform and follow SEC regulations.

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The lawsuit against Kraken also noted that the company determined staking rewards for users, which may have been a significant factor in the charges.

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The SEC has declined to comment on the implications of the case on staking at large.

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