By Nathan Ferguson
Crypto markets currently declining because of the recent enforcement action taken by the US Securities and Exchange Commission (SEC) against crypto staking. Nonetheless, this could also provide a silver lining for crypto staking and Ethereum. On the 9th of February, the SEC – under the leadership of Gary Gensler – targeted the Staking-as-a-Service (SaaS) facility of Kraken (a prominent crypto exchange).
Analyst Opines that the Staking Ban by SEC Could Further Decentralize Ethereum
The regulatory agency asserts that the US-based crypto exchange platform is providing unlicensed securities via the staking services. As a result of this, the crypto exchange stopped its staking-as-a-service facility. Subsequently, the crypto markets have witnessed a downturn. On the 10th of this month, the well-known trader and analyst named Alex Krüger offered positive remarks on the new regulatory clampdown by the US regulator.
The analyst stated that a likely prohibition on crypto staking by the SEC could push this service to overseas or off-chain. In this way, he added, Ethereum would become decentralized to a further level and move beyond the span of the regulatory bodies operating in the United States. Krüger additionally anticipated that the respective narrative could provide an optimistic scenario.
As per the analyst, an analogous situation was witnessed following the prohibition of Bitcoin as well as the exodus of BTC miners from China. He said that this event led to the additional decentralization of the network.
Krüger mentioned that after quitting the Chinese jurisdiction, the crypto miners settled in the United States in the majority. The analyst claimed that the further decentralization of Ethereum is predicted to take place in some upcoming weeks.
Investors do not want to quit purchasing or staking Ethereum due to ill-informed regulators in the US who intend to prohibit them from benefiting from such a great service. On the 8th of February, Brian Armstrong (the CEO of Coinbase) expressed a warning about the likely consequences of a ban on staking. As per Armstrong, the major players in the crypto industry will eventually leave the United States to some offshore places as a result.
This is just like what took place in the case of the notorious crypto exchange FTX. The crypto-hostility of Gary Gensler (the chairman of the Securities and Exchange Commission) will in the end do more damage than providing any benefit. According to Armstrong, in such an attempt, the SEC chair will further harm the investors whom he intends to protect.
On the other hand, Brad Garlinghouse – the chief executive officer (CEO) of the crypto exchange Ripple – referred to the optimistic steps taken by the financial regulators across the regions like Brazil, South Korea, the United Kingdom, Australia, and Dubai. However, he added, the US regulators are not making pace with their counterparts in the rest of the jurisdictions.
Crypto Industry Sees a Staggering 5.3% Drop after Recent Staking Crackdown on Kraken
The CEO moved on to say that transparency and clarity are the things on which the worldwide regulators are focusing at present. Nevertheless, no attention is being paid by the US regulatory agencies to this aspect. The SEC chair thinks that the existing laws are not deficient in properly regulating the world of crypto assets.
As a consequence of the recent crackdown by the SEC, the crypto markets saw a slump of almost 5.3% in cumulative market capitalization during the previous 24 hours. The crypto markets lost an enormous amount of $60 billion in the meantime.