Crypto firms have been put on notice about how staking digital assets can run afoul of US financial rules, according to Securities and Exchange Commission Chair Gary Gensler.
(Bloomberg) — Crypto firms have been put on notice about how staking digital assets can run afoul of US financial rules, according to Securities and Exchange Commission Chair Gary Gensler.
Gensler said that a settlement the regulator announced with crypto exchange Kraken on Thursday “should put everyone on notice in this marketplace.” It’s the latest salvo by the SEC chief against an industry he says often skirts his agency’s rules.
Crypto staking works by letting users generate yields in return for allowing their tokens to be used to facilitate transactions on a blockchain. The SEC says that can resemble a security that should be registered with the agency.
The fallout from Kraken’s settlement with the SEC has quickly rippled across the industry with shares from Coinbase Global Inc., which also offers staking, tumbling on the news. Kraken agreed to pay $30 million to settle the allegations and to discontinue staking in the US.
“Other platforms should take note of this and seek to come into compliance, do the proper disclosures and registration and the like,” Gensler said on Friday in an interview on CNBC.
Gensler also repeated his warning to crypto trading platforms that he planned to hold them accountable if they don’t register with the agency. The runway for them to register and come into compliance with SEC rules is getting “awfully short,” he added.
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