- Kraken’s staking-as-a-service program was charged by the SEC for unregistered securities sales.
- SEC to issue a fine of $30 million on the crypto firm.
- SEC was planning to prohibit cryptocurrency staking for retail users in the United States.
According to a tweet posted by Bloomberg Crypto on Thursday, the SEC will issue a fine on the cryptocurrency exchange that will total $30 million. The court found that Kraken had broken the law when it failed to properly register the sale and distribution of its Ethereum (ETH) staking as a service offering, and as a result, it had to pay a fine.
The SEC alleged that Kraken’s staking service was an illegal sale of securities. Read more on the settlement here https://t.co/iY0E3KupTe
— Bloomberg Crypto (@crypto) February 11, 2023
This comes after the CEO of the cryptocurrency exchange company Coinbase Brian Armstrong recently indicated that he had heard allegations that the SEC was planning to prohibit cryptocurrency staking for retail users in the United States.
The settlement between Kraken and the SEC may have appeared like bad news for the crypto-staking industry as a whole. Jesse Powell, who is the co-founder and also the CEO of the cryptocurrency exchange, took his disappointments to his Twitter account, where he stated:
<blockquote>Oh man, all I had to do was fill out a form on a website and tell people that staking rewards come from staking? I wish I’d seen this video before paying a $30m fine and agreeing to permanently shut down the service in the U.S. How dumb do I look?<blockquote>
This comes after the Internal Revenue Service (IRS) of the United States filed a request with a U.S. jury to examine Kraken’s records, books, and data to track and ascertain the federal taxable income and taxes for all individuals who transacted in cryptocurrencies on December 31, 2016, 2017, 2018, 2019, and 2020.