Cryptocurrency exchange Kraken has settled charges brought by the US Securities and Exchange Commission (SEC). This is stated on the website of the regulator.
Earlier, a source told Bloomberg about an ongoing investigation into the platform. According to a Feb. 9 press release, the agency’s attention was drawn to a steaming program whose offer and sale Kraken “failed to register”.
“Today’s action should send a message to the marketplace that providers of steaming as a service should register and provide full, fair, and truthful disclosure and investor protection,”
said SEC Chairman Gary Gensler.
Kraken neither admitted nor denied the charges, but agreed to shut down the program and pay $30 million in fines.
In a comment to The Block, a company spokesperson clarified that the restrictions apply only to U.S. customers.
SEC Commissioner Hester Pierce criticized her agency’s actions, saying that mandatory regulation “is not an effective and fair way to go.
Coinbase CEO Brian Armstrong echoed Pearce’s sentiments. He said the SEC’s requirement to register steaking as an offer of securities is “disingenuous” because there is no clear way to do so.
The SEC’s actions angered members of the community. Adam Cochran, a partner at Cinneamhain Ventures, called Gensler an “agent of the anti-cryptocurrency program” and asked why the same standards were not applied to the failed FTX.
Blockchain Association CEO Christine Smith said the Kraken situation is a “textbook example” of why the U.S. Congress should work with industry players to create a regulatory framework instead of the SEC.
U.S. House of Representatives member Tom Emmer, who has repeatedly criticized Gensler, pointed to the important role of steaking “in creating the next generation Internet.”
Some in the community wondered how Kraken could register its product with the SEC when the agency has “no clear path to approve cryptocurrency steaks.”
Not everyone disagreed with the commission, however. Former MicroStrategy chief Michael Saylor noted that the SEC chairman “understands the importance of self-storage.
Prior to that, Saylor supported strong regulation of the digital asset industry. In his view, this is a necessary element of its growth.
Amid the news of Kraken’s shutdown, the IRS has filed a petition to enforce an order sent to the exchange in 2021, according to CoinDesk. At issue is a request for information about the platform’s customers and their transactions, as part of its tax enforcement obligations.
The company stressed that one of Kraken’s guiding principles is to ensure the security and privacy of its users.
