Bitcoin price retreats to staking amid reports of Kraken probe and rumors of SEC attack
Bitcoin (BTC) is falling on news that the US Securities and Exchange Commission (SEC) has launched an investigation into Kraken for illegally trading in unregistered securities.
According to Bloomberg, the SEC is investigating Kraken, the world’s third-largest crypto exchange, for possibly violating securities rules by offering certain products to people living in the United States.
Bitcoin is worth $22,596 at the time of writing, down more than 3.5% from its peak the day before the report was published.
According to the report, the investigation could be nearing completion, with a possible settlement coming within days. Which tokens or other products triggered the SEC investigation remains unknown.
The US-based exchange offers customers around 185 different cryptocurrencies to invest in, as well as the ability to stake their holdings for rewards.
Bloomberg predicts that any settlement would have wider implications for the crypto sector.
says the report
“A settlement with the SEC could put pressure on other crypto firms to do business with the regulator, which has repeatedly said most of the tokens on offer are securities that should be subject to the agency’s rules.”
Following FTX’s implosion in November, SEC Chairman Gary Gensler said his agency will become more aggressive in enforcing crypto firms that have not registered with the SEC.
Meanwhile, the head of US-based crypto exchange Coinbase, Brian Armstrong, has criticized any move by the SEC to crack down on crypto staking.
“We are hearing rumors that the SEC wants to end crypto staking in the US for retail customers. I hope that is not the case as I believe it would be a terrible trajectory for the US if this were allowed to happen.”
According to Armstrong, staking is vital to the crypto sector.
“Staking is a really important innovation in crypto. It allows users to participate directly in the operation of open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security and reduced carbon footprint.”
He also says that the SEC shouldn’t consider sticking a security and that federal agency should enact rules that encourage the crypto sector or exchanges will leave the US.
“We need to ensure that new technology in the US is encouraged to grow and not stifled by a lack of clear rules. When it comes to financial services and Web3, it’s a matter of national security that these skills are expanded in the US.
Regulation by enforcement does not work. It encourages companies to operate offshore, which has happened with FTX.
Hopefully we can work together to publish clear rules for the industry and come up with sensible solutions that protect consumers while safeguarding innovation and national security interests in the US.”
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