SEC chair issues warning to crypto firms after action on Kraken staking
U.S. Securities and Exchange Commission Chairman Gary Gensler warned crypto companies to “come and follow the law” after the agency announced a settlement with cryptocurrency exchange Kraken.
Appearing on CNBC’s Squawk Box on February 10, Gensler said crypto exchanges must register with the SEC to comply with regulations in the United States, arguing that many in the industry have “decided” not to. According to the SEC chairman, the business models of many crypto projects were “rife with conflicts”, arguing that they needed to “unravel” related products.
“If this field has any chance of survival and success, it is the time-tested rules and laws to protect investors,” Gensler said. “Don’t get into customers’ pockets by using their funds for your own platform.”
“The storefronts and casinos that people invest in need compliance and unraveling of bundled products. The business model is rife with conflict,” says the chairman of the Securities and Exchange Commission. @GaryGensler on #crypto. “If this area has a chance of survival, it needs laws to protect investors.” pic.twitter.com/FGRrYE1Aov
— Scream Box (@SquawkCNBC) February 10, 2023
Gensler’s announcement follows the SEC announcing it has reached an agreement with Kraken in which the exchange agreed to close its services and staking programs to U.S. clients, as well as pay $30 million in fines for non-payment of debt, interest pending judgment, and civil sanctions. Kraken said it will continue to offer staking services to users outside the US through a separate subsidiary.
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Many criticize the SEC settlement as regulators take action against firms that need to navigate the regulatory space without clear guidance. SEC Commissioner Hester Pierce called the SEC’s actions “lazy and paternalistic,” saying the staking program “has served the people well.”
Credit : cointelegraph.com