Kraken’s Staking Program Shut Down by SEC: Paternalistic and Lazy

• Kraken and its subsidiaries Payward Ventures and Payward Trading reached a settlement with the Securities Exchange Commission (SEC) on February 9th.
• SEC Commissioner Hester M. Pierce has dissented with the closure of Kraken’s staking program, arguing that it should have been registered with the SEC as a securities offering.
• Commissioner Pierce believes that using enforcement actions to inform people what the law is in an emerging industry is not an efficient or fair way to regulate and calls the recent settlement by the SEC a “paternalistic and lazy regulator.”

Kraken & Subsidiaries Settle with SEC

Following the settlement reached by Kraken and its subsidiaries Payward Ventures and Payward Trading with the Securities Exchange Commission (SEC) on February 9, covered by Bitcoinist, Commissioner Hester M. Pierce stated in a report that she disagreed with and dissented with the closure of the crypto exchange’s staking program.

Staking Program Should Have Been Registered

The regulator argued that this staking program should have been registered with the SEC as a securities offering. SEC Commissioner Pierce, also known as “Crypto Mom,” argues whether or not registration would have been possible in the current crypto-related climate: An offering like the staking service at issue here raises a host of complicated questions, including whether the staking program as a whole would be registered or whether each token’s staking program would be separately registered, what the important disclosures would be, and what the accounting implications would be for Kraken.

SEC Poor Judgement?

Solution Or Poor Judgement By The SEC? The Commissioner stated that the SEC has been aware of the staking programs for an extended period. Thus, she suggests