Gary Gensler, the Chairman of the US Securities and Exchange Commission, has issued a warning to crypto companies to follow the law, following the commission’s recent lawsuit against the crypto exchange Kraken for alleged unregistered offering of staking services. The exchange has paid a $30 million fine in a settlement with the regulator and has stopped offering the staking service.
Registration Required for Crypto Exchanges Gensler stated that crypto exchanges must register with the SEC to comply with regulations in the United States and claimed that many in the industry “chose” not to do so. He stated the following about other crypto platforms:
“Companies like Kraken can offer investment contracts and investment programs, but they must have full, fair and truthful disclosure. And this places the investors looking at your program in a better position. That’s our basic agreement. They did not comply with that basic law.”
Gary Gensler SEC Chairman
When presenter Andrew Ross Sorkin asked how the enforcement action could apply to other earning programs, such as Coinbase’s Earn program, Gensler said that labels – whether a program is called ‘lend’, ‘yield’, or ‘earn’ – don’t matter as much as the underlying economy.
Criticism from the Crypto Community
Yesterday, the decision by the SEC was met with criticism from both the crypto and financial worlds. Major names in finance and politics argue that the current approach of US regulators will have adverse effects. Instead of protecting all crypto investors, they believe the crypto industry in the US would benefit more if the SEC were less hostile.
What was the lawsuit against Kraken about?
The lawsuit against Kraken was about the alleged unregistered offering of staking services. The US Securities and Exchange Commission (SEC) sued the crypto exchange for offering these services without proper registration and regulatory compliance.
What is the stance of the SEC Chairman on crypto companies and regulation?
The SEC Chairman, Gary Gensler, has issued a warning to crypto companies to follow the law and register with the SEC to comply with regulations in the United States. He emphasized the need for full, fair, and truthful disclosure from crypto companies, and stated that non-compliance with basic laws places investors in a vulnerable position.