Kraken Pays A Huge Settlement Fee To SEC, Announces Winding Down On Crypto Staking

One of the oldest and largest cryptocurrency exchanges based in the United States, Kraken has made it to the headlines with its latest action.

The officials at the exchange have confirmed that they have settled their lawsuit with the US Securities and Exchanges Commission (SEC).

Kraken Settles Lawsuit for $30 Million

As per the officials at the Kraken exchange, they have paid $30 million to settle their lawsuit with the securities regulator.

They have confirmed that the settlement amount has been paid for multiple penalties. These penalties include civil, prejudgment, and disgorgement penalties.

The US SEC had taken the Kraken exchange to the court making a claim against its operations in the United States.

The regulator claimed that the particular exchange is involved in offering cryptocurrencies to the US locals without getting them registered.

The regulatory authority claimed that the US SEC had reportedly filed a lawsuit involving nine cryptocurrencies. However, the regulator did not mention the names of the cryptocurrencies.

The regulator did claim that the exchange was involved in selling these cryptocurrencies without having them registered.

The main concern that the securities regulator raised was that the exchange was offering staking services for particular cryptocurrencies.

However, the exchange operating since 2011 decided to settle the lawsuit against the allegations that the US SEC had made against their operations.

It was on February 9 when the Kraken exchange officially announced that they had settled their lawsuit with the SEC for the unregistered staking service offerings.

More from the Settlement

The most alarming and concerning aspect of the settlement penned by Kraken with the SEC is the discontinuation of the staking services.

The Kraken exchange started offering staking services for cryptocurrencies back in 2019. Since then, the platform had been offering the same services to the US locals.

With the SEC claiming that these services were unregistered in the United States, the exchange could no longer continue with those options.

As part of the settlement, the exchange will be removing the staking facility from its platform for US-based users.

Statement by Gary Gensler

The chair of the securities regulatory authority, Gary Gensler made a statement about their settlement with the exchange.

He stated that their settlement with the Kraken exchange is an actual victory that they have registered against the cryptocurrency industry.

By settling the lawsuit, the exchange has indirectly admitted to offering unregistered crypto-staking services to the US locals.

Gensler stated that it is extremely important for every cryptocurrency firm offering securities to the US locals to strictly adhere to the regulatory policies.

They have to adhere to the guidelines and ensure that they continue exercising compliance so they can continue operating without any hindrance.

This way, the firms can continue operating without any problems and they can keep on offering new tools for investments to the users.

If their services and assets are registered, they have nothing to worry about and they can continue operating without any problems.

He went on to state that whether a firm is offering investment contracts, crypto intermediaries, lending, or staking services, they must be authorized by the SEC.

Now that the exchange has settled the lawsuit with the SEC, it has demanded that the exchange must get every asset registered before offering them for staking.

They have to get them fully registered and then start offering them for staking purposes. This way, the platform will be able to offer investor protection and truthful disclosure to the investors.

It seems that the exchange is not ready to get the assets registered for now. This is the reason why the exchange has announced that it is going to stop offering staking services in the United States.

The decision made by the exchange is going to give more confidence to the regulator. It may file more lawsuits against other major cryptocurrency firms related to the same matter.

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