By James Davis
The recent move by the Securities and Exchange Commission (SEC) to go after firms offering staking services has not been welcomed by crypto fans. However, despite the uproar, the Commission chairman Gary Gensler doesn’t seem to be bothered.
On Friday, Gensler was a guest speaker at CNBC’s SquakBox show, where he blamed crypto exchange Kraken for not registering its staking service with the agency. Furthermore, he dismissed the usual criticism that there are no clear policies governing crypto nor a clear path to register such assets.
The chair argued that a clear way to register those assets is provided on SEC’s official website. He added that most crypto players are aware of the registration process but choose to ignore it.
Crypto Staking and how it Works
Crypto staking is applied in Proof-of-Stake blockchains to validate transactions and secure their networks. Kraken stakes its users’ crypto on their behalf, and in the process, it generates yields that a shared between the exchange and the users.
However, the SEC demanded Kraken suspend the service for its American users and pay penalties amounting to nearly $30 million. According to Gensler, the exchange failed to provide risk disclosures. He, however, said Kraken could once again offer its staking services to its US clients if it complies with the law.
Crypto Supporters Disagree With SEC Enforcement Action on Kraken
A few days ago, Coinbase CEO Brian Armstrong expressed concerns about the recent SEC crackdown on staking services. He said it was a terrible move and argued that staking services don’t involve any securities transactions; instead, they are meant to provide scalability in the industry.
Some SEC commissioners have disputed the agency’s action targeting Kraken, claiming that the regulator did not provide a clear way to register the staking service. In addition, Congressman Tom Emmer has also criticized the SEC’s action. He said that it could discourage crypto firms from entering the US market.
Nonetheless, the SEC chair continues to insist that he is getting impatient with crypto firms not complying with the law. He notes that companies in other industries have had no issues with registration.