Kraken Boss Appeals to Congress for US Crypto Protection Following SEC Settlement on Staking Service

The CEO of crypto exchange Kraken, Jesse Powell, has called on Congress to pass laws to preserve the US cryptocurrency industry following the Securities Exchange Commission’s (SEC) action against his platform’s trading of crypto staking services.

Kraken Leader Responds to SEC Move

Kraken CEO Jesse Powell urged Congress to pass a regulation to safeguard the domestic crypto industry Thursday after the US Securities Exchange Commission (SEC).

The Kraken head tweeted:

Congress must take steps to protect the US crypto industry and US customers, who will now have to go abroad to find providers not located in the US.

As part of the settlement with securities regulators Kraken has agreed to terminate its cryptocurrency staking program for US customers, and pay $30 million in reimbursement, prejudgment interest, and civil penalties.

Kraken clarified in a blog post Thursday:

Staking services for customers outside the US will go on without interruption. Non-US customers can continue to stake and withdraw funds and earn and wager rewards as usual.

In response to the SEC’s enforcement action, Kraken’s SEC staking program Commissioner Hester Peirce issued a statement disapproving and dissenting from the action of her agency. “A lazy, paternalistic regulator settles on a solution like this: don’t start a public process to develop a viable registration process that provides valuable information to investors, just shut it down,” she wrote.

In response to Commissioner Peirce’s statement, Powell tweeted: “Some guidance would be appreciated.” He added that the SEC’s approach of “This is wrong, but I won’t tell you how to get it right. Do you want to know if X works? Try it and see what happens” does not help customers or the cryptocurrency industry. “We are not against regulation, but we need a clear path to operate,” he stressed.

In a follow-up tweet is the Kraken CEO’s opinion:

I hope that someone proves in court that there is a legal model for staking services that is user-friendly and accessible to American customers. The US industry and customers will be immensely grateful for the long and expensive fight.

What do you think about the SEC’s pursuit of cryptocurrency staking programs on exchanges? Let us know via the feedback page.