By Drew Hinkes, Carly Howard, and Judie Rinearson

The Securities and Exchange Commission (SEC) announced a settlement with the digital assets/cryptocurrency exchange Kraken whereby Kraken agreed to cease offering or selling securities through its crypto asset staking services, and agreed to pay a penalty of $30 million (comprising disgorgement, prejudgment interest, and civil penalties).

The announcement (see https://www.sec.gov/news/press-release/2023-25) has garnered some criticism, including comments from SEC Commissioner Hester Peirce, that the staking ban was “not a fair way of regulating”. (see https://decrypt.co/121029/sec-commissioner-peirce-kraken-staking-ban-not-fair-way-regulating)

This most recent SEC action has raised numerous questions about other crypto staking programs, and the impact on the crypto industry in general.  While the K&L Gates Digital Assets team prepares an in-depth assessment of this latest action, feel free to contact us should you have any questions. 

Drew Hinkes – Andrew.Hinkes@klgates.com

Carly Howard – Carly.Howard@klgates.com

Rich Kerr – Richard.F.Kerr@klgates.com

Jeremy McLaughlin – Jeremy.Mclaughlin@klgates.com

Judie Rinearson – Judith.rinearson@klgates.com

Eden Rohrer – Eden.rohrer@klgates.com 

Source: https://www.fintechlawblog.com/2023/02/crypto-platform-kraken-pays-30-million-and-ceases-staking-services-to-settle-sec-charges/