Crypto exchange Kraken settles with SEC for $30 million, will close U.S. staking operation
Summary
The SEC claims Kraken failed to register the offer and sale of its crypto staking-as-a-service program. Many centralized exchanges like Kraken and Gemini offer customers the option to stake their tokens in order to earn yield on their digital assets that would otherwise sit idle on the platform. "Whether its through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors tokens," companies must "provide the proper disclosures and safeguards required by our securities laws," SEC chair Gary Gensler said in a statement. The SEC alleged that, to incentivize users, Kraken promised investors in the staking program "enhanced liquidity and immediate rewards." Kraken advertised on its website returns of up to 20% annual percentage yield through its staking product.