Kraken Agrees to Stop Cryptocurrency Staking Operations in SEC Settlement

Leading Cryptocurrency Exchange Kraken The US Securities and Exchange Commission (SEC) has agreed to shut down its staking operations as part of a settlement with CoinDesk. informed of on Thursday, citing a source familiar with the matter.

The settlement was reportedly approved with a public announcement during a private meeting of the SEC’s commissioners on Thursday.

The decision to discontinue staking services for US customers was later confirmed by the SEC.

Kraken offered a variety of staking services, including a crypto-lending product that promised yields of up to 24%.

According to sources, these services are also expected to be discontinued as per the agreement.

On its website, Kraken’s staking service advertised a 20% annual percentage yield, with customers to be paid twice weekly.

Benzinga reported on Wednesday Kraken was close to settling with the SEC regarding the unregistered securities offering.

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this news came a day later Coinbase CEO Brian Armstrong tweeted about rumors that the SEC was planning to bar retail customers from participating in staking, a process where individuals hold crypto tokens to support the functioning of a blockchain such as Ethereum ETH/USD,

SEC Chairman Gary Gensler has previously expressed its belief that trading through intermediaries, such as Kraken, may fall within the definition of securities according to the Howe test, a decades-old Supreme Court case used to determine whether certain US laws security under.

Gensler compared the stake to lending and noted that the SEC had previously brought charges against lending companies and now includes bankruptcies. blockfi,

According For Dune Analytics, most individuals betting on Ethereum use intermediaries such as Kraken.

Following the news of the settlement, the cryptocurrency market experienced a decline with Ethereum Down 4.5% within 30 minutes.

Read further: China backs blockchain development, continues crackdown on cryptocurrencies

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