SEC Chair Gary Gensler is warning other platforms to “take note” of crypto exchange Kraken’s move to halt its staking service in the country. The regulator said a day after Kraken said it will pay a $30 million fine to settle SEC charges that the exchange’s actions could have a ripple effect throughout the industry.
“This action should serve as a warning to other platforms that offer yield-earning programs,” Gensler said in a statement. “They need to come into compliance with the securities laws.”
Kraken’s decision to halt its staking service in the United States and pay a $30 million fine is sure to have a ripple effect throughout the industry, SEC Chair Gary Gensler said in a statement.
“This action should serve as a warning to other platforms that offer yield-earning programs,” Gensler said. “
Gary Gensler, former chairman of the Commodity Futures Trading Commission, explained how the recent enforcement action against crypto exchange Kraken might apply to other yield-earning programs such as Coinbase’s Earn.
Gensler emphasized the importance of full, fair and truthful disclosure from companies offering investment contracts and investment schemes.
If somebody’s taking their tokens and transferring it to that platform, the platform controls it and guess what happens if they go bankrupt? You stand in line at the bankruptcy court,” Gensler said, taking aim at the string of bankruptcy cases in progress including that of crypto lender Celsius Network.
A U.S. bankruptcy court judge ruled in January that any crypto deposited on the platform as part of its Earn program belonged to Celsius and not customers.
This could have serious consequences for users who could potentially lose their investments if the company goes bankrupt.
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