Here is why Kraken settled the case with the SEC instead of a legal fight

Kraken’s co-founder indirectly stated that Kraken was not in a healthy position to fight against the US authorities.

As we know that on 10 Feb 2023, the Kraken exchange confirmed that the United States Securities and Exchange Commission (SEC) charged a fine of $30 million against the Crypto staking offerings, which was a violation of the Securities Act under the purview of the SEC ruling. Under the settlement decision, Kraken also terminated its crypto-staking services for US customers.

After the Kraken vs SEC settlement case, many Crypto experts shared their opinion to figure out the most  possible factor that forced the SEC agency to take action against Kraken’ crypto staking services under security offerings. 

Kraken co-founder Jesse Powell shared his opinion on this case and noted that Crypto staking via Kraken’s platform was legal but still Kraken settled the case because a legal fight against the SEC agency could be expensive. But he hopes that in the future somebody will show a better stand against this ruling.

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I honestly hope that somebody proves, in court, that there is a legal, user-friendly version of custodial staking that can be offered to US consumers. It’ll be a brutal, lengthy, expensive fight and a massive distraction but the industry and the USA will be extremely grateful. https://t.co/lhZPxykznD

— Jesse Powell (@jespow) February 9, 2023

So here indirectly Kraken co-founder revealed that Kraken is not standing in a better position to fight against US authorities. 

Powell also noted that the SEC agency was waiting for a perfect time to impose such regulatory action on the company because the current phase of the crypto market is standing at winter’ peak level and the company is also facing a significant revenue downfall.

Bigger balance sheet wouldn’t hurt either. They picked the bottom of the bear market, waited for us to do a 30% layoff. They have all our financials, lots of leverage. Maybe we looked weak. This is more about FTX than it is us or staking but the timing was not great. Potential… https://t.co/p3DKDA9VRU

— Jesse Powell (@jespow) February 9, 2023

Kraken co-founder also indirectly dragged FTX exchange and said that survival for a crypto exchange with millions of dollars to the politician could be a good option.

I heard donating hundreds of millions of client funds to politicans worked for one new exchange.

— Jesse Powell (@jespow) February 10, 2023

Ripple vs SEC

Since Dec 2022, Ripple vs SEC legal fight has been going on. Just a few months ago Ripple officials disclosed that the company already spent a very big amount of funds in this case. 

Through the lawsuit, the sec agency claimed that XRP was an unregistered security token and also sold more than $1.3 billion worth of unregistered securities publicly. 

Read also: Indian finance minister says Crypto is 99% technology

Here is why Kraken settled the case with the SEC instead of a legal fight

 

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