Kraken reactivates staking in the US after regulatory uncertainties. Here's what it means for users and which cryptocurrencies are affected.
Cryptocurrency giant Kraken has issued a statement restarting staking services for US-based users and customers.
This move follows a period of regulatory uncertainty after a thorough review recently conducted by the Security and Exchange Commission. The reinstatement of staking services demonstrates renewed confidence in the regulatory space and provides U.S.-based customers with a consistent way to earn rewards on their digital assets.
The SEC's Regulatory Amendments Allow Kraken to Increase Bidding
In 2023, Kraken faced heightened scrutiny from the SEC regarding its staking services.
The SEC's interest focused on whether these services could constitute an offering of unregistered securities. This regulatory pressure led Kraken to temporarily suspend its staking processes in the United States, as well as pay $30 million in settlements for the allegations of offering unregistered securities.
After careful evaluation and collaboration with administrative agencies, Kraken has successfully managed the complexities of the regulatory framework. The exchange has worked continuously to ensure that its staking service is compliant with current regulations, leading it to confidently re-launch the service for US users.
Kraken's Role of Staking and Input
Cryptocurrency staking involves holding and locking specific digital currencies to support the operations of a blockchain network. As a result, users receive rewards, often in the form of additional cryptocurrency. Staking plays a key role in maintaining the security and efficiency of many blockchain networks, particularly those based on Proof-of-Stake (PoS) consensus mechanisms. Through staking, crypto users contribute to the blockchain validation process, confirming transactions and protecting the network from attacks.
The staking service reactivated by Kraken will include several well-known cryptocurrencies, allowing users to diversify their wallets. Although the specific list of supported currencies may change over time, it is expected that Cardano (ADA), Polkadot (DOT), Ethereum (ETH) and Solana (SOL) will be among those available. Users will be able to staking their assets directly through Kraken, with a simplified process that makes it accessible to a broad user base.
Kraken has expanded its services beyond staking. In December, the company launched a layer-2 blockchain called Ink, with the aim of improving decentralisation and interoperability.
We're excited to announce Ink is live on mainnet!
Months ahead of schedule, we're officially launching as part of the Optimism Superchain. This is just the beginning of our journey to bridge the gap between users and builders in DeFi.
Despite this major success, Kraken is still facing legal battles. Recently, a US judge rejected Kraken's argument that the SEC has no authority over cryptocurrencies under the fundamental issues doctrine. In addition, the company has had regulatory compliance issues in Australia, where the Australian Securities and Investments Commission (ASIC) said Kraken failed to comply with local regulations and offered securities to over 1,100 Australian customers. For these allegations, Kraken paid an $8 million fine.
In addition to this, Kraken has decided to close its NFT marketplace by 27 February 2025. The company plans to allocate those resources to other projects, as the NFT marketplace is going through a difficult period.
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The characterisation of digital currencies has recently been the subject of important discussions. One of the questions is whether assets, such as non-fungible tokens (NFT) and MEME coins, should be classified in the category of commodities and securities.
Cryptocurrency giant Kraken has issued a statement restarting staking services for US-based users and customers.
This move follows a period of regulatory uncertainty after a thorough review recently conducted by the Security and Exchange Commission. The reinstatement of staking services demonstrates renewed confidence in the regulatory space and provides U.S.-based customers with a consistent way to earn rewards on their digital assets.
The SEC's Regulatory Amendments Allow Kraken to Increase Bidding
In 2023, Kraken faced heightened scrutiny from the SEC regarding its staking services.
The SEC's interest focused on whether these services could constitute an offering of unregistered securities. This regulatory pressure led Kraken to temporarily suspend its staking processes in the United States, as well as pay $30 million in settlements for the allegations of offering unregistered securities.
After careful evaluation and collaboration with administrative agencies, Kraken has successfully managed the complexities of the regulatory framework. The exchange has worked continuously to ensure that its staking service is compliant with current regulations, leading it to confidently re-launch the service for US users.
Kraken's Role of Staking and Input
Cryptocurrency staking involves holding and locking specific digital currencies to support the operations of a blockchain network. As a result, users receive rewards, often in the form of additional cryptocurrency. Staking plays a key role in maintaining the security and efficiency of many blockchain networks, particularly those based on Proof-of-Stake (PoS) consensus mechanisms. Through staking, crypto users contribute to the blockchain validation process, confirming transactions and protecting the network from attacks.
The staking service reactivated by Kraken will include several well-known cryptocurrencies, allowing users to diversify their wallets. Although the specific list of supported currencies may change over time, it is expected that Cardano (ADA), Polkadot (DOT), Ethereum (ETH) and Solana (SOL) will be among those available. Users will be able to staking their assets directly through Kraken, with a simplified process that makes it accessible to a broad user base.
Kraken has expanded its services beyond staking. In December, the company launched a layer-2 blockchain called Ink, with the aim of improving decentralisation and interoperability.
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Despite this major success, Kraken is still facing legal battles. Recently, a US judge rejected Kraken's argument that the SEC has no authority over cryptocurrencies under the fundamental issues doctrine. In addition, the company has had regulatory compliance issues in Australia, where the Australian Securities and Investments Commission (ASIC) said Kraken failed to comply with local regulations and offered securities to over 1,100 Australian customers. For these allegations, Kraken paid an $8 million fine.
In addition to this, Kraken has decided to close its NFT marketplace by 27 February 2025. The company plans to allocate those resources to other projects, as the NFT marketplace is going through a difficult period.
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