The US SEC Crypto Staking Crackdown Provides Decentralized Services, Here’s how
According to Bloomberg, on February 10, decentralized finance protocols like Lido, Rocket Pool and StakeWise could benefit from the U.S. Securities and Exchange Commission’s (SEC) crackdown on crypto staking services.
The decentralized staking protocol is only beneficial if it does not face a similar regulatory action from the SEC or any other regulators in future.
How Crypto Staking Crackdown Can Help Decentralized Services
U.S.-based cryptocurrency exchange Kraken settled SEC claims regarding the unregistered sale and offer of securities through its staking as-a-service program. The $30 million payment was made by the crypto exchange and the company agreed to end the US service.
Many in the DeFi community believe that the autonomous aspect of DeFi apps led to them falling outside the regulations as “no individual benefit directly.” This is because people use these DeFi apps to trade and lend without intermediaries through the use automated protocols.
Henry Elder, Wave Financial’s head of decentralized finance, stated:
This is a huge advantage for decentralized staking providers such as Lido, Rocket Pool, or StakeWise. Their competitive advantage is their innate resistance against regulatory action — something that matters little in the absence thereof.
Staking is a way to earn rewards and yields. You can lock up crypto tokens that allow you to order transactions on different blockchains, such as Ethereum. To increase their revenues, crypto exchanges like Binance, Kraken, or Coinbase have introduced staking services.
Austin Campbell, an adjunct professor at Columbia Business School asserts that the crypto staking crackdown will be a positive development for decentralized platforms and on-chain direct stakestaking in the short term. DeFi can’t call it a win yet because it’s still too early. Similar to what’s happening in crypto exchanges, regulators are more likely to order platforms to register with their offices.
Also read: “Operation Choke Point 2.0: Is the US planning a crackdown on the Crypto Market?”
Rocket Pool (RPL), Lido DAO, and Rocket Pool (LDO) Price Jump
Rocket Pool (RPL), and Lido DAO(LDO) prices have risen by 25% and 30% respectively in the past two days.
The RPL price is currently $54.48, an increase of 17% over the last 24 hours. The LDO price is currently trading at $2.68, a mere 2% decrease in the last 24hrs.
Also read: Hester Peirce, SEC Commissioner, denounces Agency’s crackdown on Kraken’s Staking Service
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