• Kraken agreed to pay a $30m fine and shut down its crypto-staking service for US customers due to SEC charges of offering unregistered securities.
• The SEC announced that Payward Ventures, Inc. and Payward Trading Ltd., the registered companies that make up Kraken, will end staking services and programs.
• Former SEC Attorney Zachary Fallon discusses what this could mean for the future of SEC enforcement actions over the crypto industry.
Kraken Agrees to $30M Fine
Kraken has agreed to pay a $30 million fine and shut down its crypto-staking service for US customers due to charges from the Securities and Exchange Commission (SEC) of offering unregistered securities. The complaint alleges that Kraken had been touting an easy-to-use platform with benefits derived from their efforts on behalf of investors since at least 2019.
Payward Ventures & Payward Trading Affected
The SEC announced that Payward Ventures, Inc. and Payward Trading Ltd., the registered companies that make up Kraken, will end staking services and programs as part of the settlement agreement. Any assets staked by U.S. clients except for staked ether will be automatically unstaked, with ether being unstaked after Ethereum Network’s Shanghai upgrade takes effect.
Implications for Future Enforcement Actions
Former SEC Attorney Zachary Fallon has discussed potential implications this could have for future enforcement actions taken by the commission over the crypto industry in general terms such as clarification over who can offer securities versus who cannot or should not be able to.
CoinDesk Scoop Confirmed
The announcement confirms a CoinDesk scoop from earlier Thursday which reported on plans by Kraken to shutter its crypto staking-as-a-service platform in light of pending settlement by the regulator involving unregistered security offerings in violation of federal law.
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