Finally, the US SEC investigation against Kraken exchange came to light and Kraken decided to stop its staking services to comply with the securities act.
Kraken is a top 3rd ranked crypto exchange in the Crypto sector. Just a day ago, Bloomberg reported that the US Securities and Exchange Commission (SEC) was investigating Kraken services over unregistered securities offerings. At that time the report failed to report the whole matter because neither SEC nor Kraken talked about that investigation.
On 10 Feb 2023, The US SEC agency announced that the agency charged Kraken exchange over an unregistered securities service offering.
The SEC agency noted that Kraken was providing services against the securities law as the exchange was providing 21% returns per year for the staking services.
The Kraken exchange also officially responded on this matter and confirmed that it will stop its crypto staking services for US-based users but Ethereum staking will remain unchanged until the Shanghai upgrade in the Ethereum network. To settle this case, Kraken will pay $30 Million to the SEC.
Many reports noted that Kraken was providing Crypto staking as a service of the Kraken exchange and it was more similar to the yield program.
A Crypto Twitter reporter noted that Coinbase talked about this SEC ruling and noted that Coinbase will not face any kind of problem because Coinbase provides crypto staking via Defi protocols and also provides proper clarification on its commission & charges, which is different from the Kraken exchange.
It is worth noting that Coinbase CEO Brian Armstrong claimed that SEC was planning to restrict the retail crypto staking services and he noted that it will result in very bad outcome for the crypto sector’s innovations.