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Crypto Exchange Kraken Settles With SEC Over Unregistered Staking Services appeared on bitcoinmagazine.com by BtcCasey.
The Securities and Exchange Commission (SEC) has charged Kraken with failing to register their crypto asset staking-as-a-service program.
The Securities and Exchange Commission (SEC) has charged Payward Ventures, Inc. and Payward Trading Ltd., commonly known as Kraken, for failing to register the offer and sale of their crypto asset staking-as-a-service program. The program allowed investors to transfer crypto assets to Kraken for staking in exchange for advertised annual investment returns.
According to the SEC’s complaint, Kraken has been offering and selling its staking services since 2019, pooling certain crypto assets transferred by investors and staking them on behalf of the investors. Staking involves locking up crypto tokens with a blockchain validator in exchange for a reward in new tokens.
Kraken has agreed to immediately cease offering or selling securities through the staking services and pay $30 million in disgorgement, prejudgment interest and civil penalties. In addition, Payward Ventures and Payward Trading, without admitting or denying the allegations, have consented to the entry of a final judgment that would permanently enjoin them from violating the Securities Act of 1933.
SEC Chair Gary Gensler commented, “Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.” SEC Director of the Division of Enforcement, Gurbir S. Grewal, added, “Today, we take another step in protecting retail investors by shutting down this unregistered crypto staking program.”
The SEC’s complaint also alleges that Kraken claimed its staking investment program offered easy-to-use benefits and strategies to obtain regular investment returns, but provided investors with zero insight into its financial condition, among other things. The investigation was conducted by Laura D’Allaird and Elizabeth Goody, under the supervision of Paul Kim, Jorge G. Tenreiro, and David Hirsch, with assistance from Sachin Verma, Eugene Hansen, and James Connor.
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This article originally appeared on bitcoinmagazine.com by BtcCasey – sharing via newswires in the public domain, repeatedly. News articles have become eerily similar to manufacturer descriptions.
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