Exchange Kraken settles with SEC on staking services
SEC accuses Kraken of not registering their staking programme as a cryptocurrency service.
The Securities and Exchange Commission (SEC) has accused Payward Ventures, Inc. and Payward Trading Ltd., better known as Kraken, of failing to register the offer and sale of their staking programme as a cryptocurrency service. The programme allowed investors to transfer their cryptocurrencies to Kraken for staking in exchange for advertised annual returns.
According to the SEC's complaint, Kraken has been offering and selling its staking services since 2019, hoarding some cryptocurrencies transferred by investors and staking them on behalf of investors. Staking involves locking cryptocurrencies with a blockchain validator in exchange for a reward in new currencies.
Kraken agreed to immediately stop offering or selling securities through staking services and to pay $30 million for disgorgement, prejudgment interest and civil penalties. In addition, Payward Ventures and Payward Trading, without admitting or denying the allegations, consented to the entry of a final judgment that would permanently prohibit them from violating the Securities Act of 1933.
SEC Chairman Gary Gensler commented, "Today's action should make clear to the market that staking-as-a-service providers must register and provide full, fair and truthful disclosure and investor protection."
The director of the SEC's Division of Enforcement, Gurbir S. Grewal, added: "Today, we are taking another step to protect retail investors by shutting down this unregistered cryptocurrency staking programme."
The SEC's complaint also alleges that Kraken stated that its staking investment programme offered easy-to-use benefits and strategies for achieving regular investment returns, but failed to provide investors with any insight into its financial situation, among other things.
The investigation was conducted by Laura D'Allaird and Elizabeth Goody, under the supervision of Paul Kim, Jorge G. Tenreiro and David Hirsch, with assistance from Sachin Verma, Eugene Hansen and James Connor.
Over the weekend, Elon Musk surprised everyone by joining Donald Trump at one of his rallies in Butler, Pennsylvania, where the former president survived an assassination attempt.
On 15 August 2024, Dubai sanctioned the legality of cryptocurrency payments for salaries, marking an important development in UAE regulations and facilitating cryptocurrency integration.
The Securities and Exchange Commission (SEC) has accused Payward Ventures, Inc. and Payward Trading Ltd., better known as Kraken, of failing to register the offer and sale of their staking programme as a cryptocurrency service. The programme allowed investors to transfer their cryptocurrencies to Kraken for staking in exchange for advertised annual returns.
According to the SEC's complaint, Kraken has been offering and selling its staking services since 2019, hoarding some cryptocurrencies transferred by investors and staking them on behalf of investors. Staking involves locking cryptocurrencies with a blockchain validator in exchange for a reward in new currencies.
Kraken agreed to immediately stop offering or selling securities through staking services and to pay $30 million for disgorgement, prejudgment interest and civil penalties. In addition, Payward Ventures and Payward Trading, without admitting or denying the allegations, consented to the entry of a final judgment that would permanently prohibit them from violating the Securities Act of 1933.
SEC Chairman Gary Gensler commented, "Today's action should make clear to the market that staking-as-a-service providers must register and provide full, fair and truthful disclosure and investor protection."
The director of the SEC's Division of Enforcement, Gurbir S. Grewal, added: "Today, we are taking another step to protect retail investors by shutting down this unregistered cryptocurrency staking programme."
The SEC's complaint also alleges that Kraken stated that its staking investment programme offered easy-to-use benefits and strategies for achieving regular investment returns, but failed to provide investors with any insight into its financial situation, among other things.
The investigation was conducted by Laura D'Allaird and Elizabeth Goody, under the supervision of Paul Kim, Jorge G. Tenreiro and David Hirsch, with assistance from Sachin Verma, Eugene Hansen and James Connor.
Read Next
Cryptocurrency Experts Criticise ECB Report Attacking Bitcoin
A think tank of cryptocurrency experts criticises the ECB document that frontally attacks Bitcoin.
Trump and Musk's Rally: A New Impetus for the Cryptocurrency Market?
Over the weekend, Elon Musk surprised everyone by joining Donald Trump at one of his rallies in Butler, Pennsylvania, where the former president survived an assassination attempt.
Dubai Approves Crypto Wages
On 15 August 2024, Dubai sanctioned the legality of cryptocurrency payments for salaries, marking an important development in UAE regulations and facilitating cryptocurrency integration.
MiCA Regulation: how the EU wants to regulate the crypto sector
MiCA is the new EU regulation for the legislative management of crypto assets.