Hester Peirce, SEC Commissioner, denounces Agency’s Crackdown On Kraken’s Staking Service

The U.S. Securities and Exchange Commission has been cracking down on Kraken, a crypto exchange that has been causing a lot of drama in the crypto world over the past two days. The SEC requested that crypto exchange Kraken cease its Crypto Asset Staking as-A-Service Program and referred it to a sale for unregistered securities.
SEC Commissioner Hester Perce and Crypto mon have voiced their disapproval at the recent actions of Kraken by the SEC. She also criticized the securities agency for not providing sufficient regulatory clarity, thereby making it extremely unclear which crypto firms should register with SEC.


Peirce stated that crypto-related offerings are not making it through registration in the current situation. Peirce also stated that there are many anomalies in the registration of services such as crypto staking.
It is unclear whether an exchange should register the whole staking program or individual tokens. There is also no information available on the accounting implications of crypto exchanges such as Kraken.
Hester Peirce stated that crypto-staking has been around for a long time. She said that the SEC should not have issued guidance in this matter until much later.
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Kraken’s Regulation Through Enforcement Is Not Right


Hester Peirce, in her message, criticized regulation through enforcement and said that this was not the right approach. She wrote:
Instead of following the traditional path of thinking through staking programmes and issuing guidance, this time we chose to speak through an enforcement case. We wanted to “make it clear to the market that staking as-a-service providers need to register and provide full disclosure and investor protection.”
The SEC Commissioner stated that the most worrying part of the SEC’s solution to this problem is closing down a program that had “served people very well”. Brian Armstrong, Coinbase CEO, had warned about the SEC’s plans for banning crypto staking a day earlier. He also supported Peirce’s comments regarding the SEC’s action on Kraken.

We will continue fighting for economic freedom (our mission here at Coinbase). Being the most trusted brand within crypto means protecting our customers against government overreach.
— Brian Armstrong (@brian_armstrong), February 10, 2023

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