The SEC’s takedown of Kraken’s staking service continues to generate after-shocks as the digital asset industry ponders its ability to provide services to US customers. Kraken paid a $30 million penalty to make the issue go away without admitting or denying any guilt regarding the SEC’s claims. But the example has been made, and any other platform providing staking to US customers is now at risk of a similar enforcement action.
Coinbase (NASDAQ:COIN) CEO Brian Armstrong, Tweeted about the SEC’s intention to gun for staking before the enforcement action was publicly announced. In recent days, Armstrong has taken to Twitter again calling the SEC’s claim that Kraken (and others) should just come in a register – calling it “Fake.” Armstrong was responding to a Tweet by Jason Calacanis, a well-known investor, who lauded the SEC’s actions against Kraken.
Disappointing to see you duped by this Jason.
— Brian Armstrong 🛡️ (@brian_armstrong) February 11, 2023
Commissioner Peirce, a keen commenter on financial innovation, issued a statement following the news of the SEC enforcement action taken against Kraken, calling the regulator “paternalistic and lazy.”
Peirce’s comment reflects the reality that the SEC tells these firms to register while at the same time not approving any attempts to register.