Crypto crackdown exposes internal fighting within the US SEC
Following the settlement with the Securities Exchange Commission (SEC) by Kraken and its subsidiaries Payward Ventures and Payward Trading on February 9 covered by bitcoin, Commissioner Hester M. Pierce said in a report that she expects the settlement to close. Disagree with and disagree with. Staking program of crypto exchange.
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 registration would be feasible in the current crypto-related climate:
An offering such as the staking service at issue here raises a number of complex questions, including whether the staking program will be registered as a whole or whether each token’s staking program will be registered separately, what the important disclosures will be, and accounting What would the implications be for Kraken.
Resolution or Bad Decision by SEC?
The commissioner added that the SEC is aware of the programs for an extended period. Thus, she suggests that the SEC should have provided guidance on staking programs “long before this situation broke out.” The commissioner further said:
Instead of taking the path of thinking through staking programs and issuing guidance, we have again chosen to speak up through an enforcement action that aims to “clarify to the market that staking-as-a-service providers must register and Must provide full, fair and truthful disclosure and investor protection.
Pierce says that using enforcement actions to tell people what the law is in an emerging industry “isn’t an efficient or appropriate way to regulate.” For the commissioner, outright enforcement action and “cookie-cutter” analysis do not provide a solution for crypto investors in the US.
Most worryingly, however, is that our solution to the registration violation is to completely shut down a program that has served people so well.
Kraken’s staking program will no longer be available in the United States, whether registered or not, Kraken is prohibited by the SEC from ever offering staking service in the US Commissioner Pierce, per the recent settlement by the SEC ” patriarchal and lazy regulator”. While providing a solution, it closes it.
The SEC is not the only body that has taken hostile steps against the crypto industry in recent months. For this reason, the SEC has been dealing with criticism from the US Senate since October 2022, claiming that the SEC chairman has overstepped his authority and taken a hostile stance towards the financial industry.
The SEC recently experienced an exodus of employees that caught the attention of the Senate, which sent a letter demanding to know why employees are leaving the nation’s corporate watchdog at the highest rate in 10 years.
The letter, released and signed by 12 Senate Republicans, cited a public report by the SEC on October 13 detailing staff resignations from the Office of the Inspector General and reports of dissent within the SEC.
According to the inspector general’s report at the time, the SEC has been losing staff at a high rate over the past ten years. This data and Commissioner Pierce’s statements reinforced the view that there is internal turmoil within the regulator, specifically regarding the crypto industry and how to regulate it.
Bitcoin retraces after SEC/Kraken settlement on 4HR chart, Source: BTCUSDT TradingView
The market has reacted to the SEC settlement with Kraken with retracements across most major cryptocurrencies in the market. Bitcoin is currently trading at $21,600. It is down 3.9% in the last 24 hours and 7.8% in the last seven days.
Bitcoin shed the important $22,000 support and looks ready to test the next abandoned support at $21,500. If it fails to overcome the nearest support, it could continue to slide towards the $20,000 area.
Feature image from Unsplash, chart from TradingView.