Gary Gensler claimed that Kraken was aware of the risks associated with crypto staking offerings but still failed to disclose with customers & register with the SEC body.
Three days ago, the United States Securities and Exchange Commission (SEC) announced that the agency fined Kraken exchange over unregistered securities offerings. Kraken settled the case with a $30 million fine, instead going to court to fight against such crucial enforcement action. The settlement of the case by Kraken exchange was really strange because Kraken took the decision instantly without any prior disclosure in the crypto sector. Many legal experts asked why Kraken settled the case instead to defend its fair crypto-staking services, which were not securities offerings.
Recently Gary Gensler, chairman of the SEC agency, appeared in an interview with CNBC. In the interview, Gary explained why SEC slammed Kraken exchange over staking services.
Gary reported that Kraken exchange failed to disclose the risks associated with Kraken’s crypto staking services and also Kraken was aware of the risk but still failed to register with the SEC to provide staking services under the Securities Act.
In short, the SEC Chairman claimed that Kraken’s Crypto staking service was more likely to yield a program with the claim of zero % risk but in reality, there was a risk probability.
Kraken co-founder Jesse Powell responded to that interview of Gary Gensler and said that he made a mistake and he should not pay a $30 million fine.
Powell noted that he took the decision instantly & blindly but at the same time he noted that the situations of the Kraken exchange are not good because of the bear market situation, so Kraken can’t fight against the SEC.
Cardano founder Charles Hoskinson also shared his opinion on the Kraken’s crypto staking service and noted that SEC enforcement action on the Kraken exchange was only because of the crypto staking model, which was falling under security offerings.
Hoskinson also indirectly claimed that SEC may consider all types of crypto staking services under the same category of ruling, if his opinion on the Kraken’ Crypto staking services is not right.