The United States Securities and Exchange Commission announced that it had reached an agreement with Kraken cryptocurrency exchange. Gary Gensler, chair of the SEC issued a warning to all crypto businesses asking them to “come in and obey the law.”
Gensler claimed that cryptocurrency exchanges should be registered with the SEC, during an appearance on CNBC’s Squawk Box February 10, 2018. Gensler claimed that many of the participants in the business were choosing not to register with the SEC. According to the Securities and Exchange Commission, the SEC’s head stated that many of the cryptocurrency projects’ business models were “rife” with conflict and that they needed to “disentangle their bundled goods.”
Gensler says that the industry must have “time-tested norms” and “laws to protect the investing public” in order to survive and thrive in the future. “Don’t take their money and use it for your own platform,” Gensler advised.
Gensler spoke after the SEC made an announcement that it had reached a settlement. Kraken agreed that it would pay $30 million in disgorgement and prejudgment interests as well as civil penalties. In addition, Kraken agreed to discontinue offering its staking services or programs to US customers. Kraken stated that it will continue to provide staking services to customers outside the United States through a different business.
The settlement reached by the SEC has faced a lot of criticism because many see it as regulators taking actions against companies who need to navigate an undefined regulatory environment. Hester Peirce (a SEC commissioner) stated that the Staking Program had “served individuals very well” and that it was possible to call the SEC’s actions “lazy and patronizing.”
