SEC Commissioner Hester Peirce has shared her thoughts on the enforcement action taken against Kraken. The crypto exchange agreed to pay a $30 million penalty pertaining to its staking service. The ability for US clients to earn a return on parked Proof of Stake digital assets has now been shuttered. It will remain available for international customers.
Peirce, long known for her thoughtful comments on innovation and regulation, questioned whether the staking service could have even registered with the SEC. She reflected on the well-known fact that the Commission has hit the pause button on any crypto-related offerings that have been trying to make it through the registration process. Commissioner Peirce lamented that, once again, “instead of taking the path of thinking through staking programs and issuing guidance, we again chose to speak through an enforcement action.”
Commissioner Peirce stated:
“Most concerning, though, is that our solution to a registration violation is to shut down entirely a program that has served people well. The program will no longer be available in the United States, and Kraken is enjoined from ever offering a staking service in the United States, registered or not. A paternalistic and lazy regulator settles on a solution like the one in this settlement: do not initiate a public process to develop a workable registration process that provides valuable information to investors, just shut it down.”
She ended by recognizing that the SEC is a regulator hostile to crypto.