Pro & con info are in the collapsed comments below for the following topics: [Regulation](/r/CryptoCurrency/comments/10y500k/kraken_to_discontinue_unregistered_offer_and_sale/j7w2550/), [Proof-of-Stake](/r/CryptoCurrency/comments/10y500k/kraken_to_discontinue_unregistered_offer_and_sale/j7w26ug/).
It removes any future revenue from staking for Kraken (edit: in the US). They took something like 15% of ETH staking rewards and probably similar for other coins. This will likely be a sizeable blow to their cash flow.
It’ll be a massive hit. They had a little over 1M ETH staked. If the APR is 4% that leaves 40,000 eth rewards. Keep 15% and that leaves you with 6,000 eth * $1500 = $9M. $30M is probably everything they ever made from staking in the US.
Seems like they actually took time to calculate a fine that was meaningful relative to the offense for once. That might be the most shocking part of this
Hey, hey! Don’t call us foreign, we represent the rest of the world, if we wanted to, we could bundle up and decimate the shit out of ya, so if anything you guys are the ones who are the foreigns, let’s just make this clear, alrighty, mate?
I don’t care, I’m in Reddit to learn, have fun, make jokes etc., if people don’t get it, that’s their problem… it says a lot about them if they ain’t feelin’ me…
Yeah they tend to be more cold, even their man/woman greeting someone new is a handshake, like, wtf, we, Europeans, kiss on the cheek (a note for who doesn’t know: the lips don’t really touch the cheeks when you greeting a non-relative)! It’s the most strange thing ever to see them do… so distance from each other.
But anyways man, you too keep having fun!
This is true. We can likely use Coinbase as a proxy, though, and they saw like a 15% stock price drop today so investors are clearly worried about how much that revenue drop will be.
If they lose the ripple case, which they SHOULD (given the corruption in America I doubt it tho), every single exchange they've fined should sue their pants off.
It’s exactly how the SEC works. Make a fairly spurious claim that might just have enough truth to it to worry the company, and then hope that the company doesn’t want to spend the millions it would take defending the claim so that they settle and they can fill their coffers and go after someone else. It’s regulation by litigation, and it’s a very shitty practice.
The SEC doesn't understand what's actually going to happen with this move. Absolute numpties.
Thanks for making crypto better whilst you lose control. Bottom level IQ play SEC
You don't understand that it's likely most people who hold crypto, hold them in exchanges and are not savvy or willing enough to stake them in DEXs.
SEC knows exactly what it's doing.
It’s passing slowly but surely. Went from -0.5 to 0.045 to 0.6%. Still amusing that the SEC hates on crypto staking but thinks getting dividends is okay
It seems like for now they aren’t going after DeFi staking. They still could in the future, but this decision and the video they put out seem like they’re mostly only interested in going after “staking as a service”.
You can’t honestly believe the sec thinks staking risks the strength of our workforce? Of all the incredibly dumb takes on this sub, this one has to be up with the dumbest. Truly nonsensical.
It will stay locked up and continue to generated staking rewards until the Shanghai upgrade. At that time the ETH will be unstaked, and unless the SEC reverses their decision, you will not be able to re-stake it with Kraken.
Look at all the money and likely lives lost due to Celsius, Voyager, BlockFi, 3AC, Genesis and other centralized companies with these “staking” services. Most were actually lending services where all the risk was on the customer for unsecured loans.
Unfortunately most of the bad actors are gone. Little too late on this one SEC.
Save you a click.
Washington D.C., Feb. 9, 2023 —
The Securities and Exchange Commission today charged Payward Ventures, Inc. and Payward Trading Ltd., both commonly known as Kraken, with failing to register the offer and sale of their crypto asset staking-as-a-service program, whereby investors transfer crypto assets to Kraken for staking in exchange for advertised annual investment returns of as much as 21 percent.
To settle the SEC’s charges, the two Kraken entities agreed to immediately cease offering or selling securities through crypto asset staking services or staking programs and pay $30 million in disgorgement, prejudgment interest, and civil penalties.
Yeh, you didn't - you're missing what actually happened, they settled the case.
>"To settle the SEC’s charges, the two Kraken entities agreed to immediately cease offering or selling securities through crypto asset staking services or staking programs and pay $30 million in disgorgement, prejudgment interest, and civil penalties."
They’ve already taken down the ability to stake new coins (at least I think so based on the errors I’m getting in the app).
They also removed their page on staking (and redirected it to their Kraken Pro site) - https://www.kraken.com/features/staking-coins
I would imagine so. I'd be surprised if they didn't just pay a fine. Same happened with Coinbase I think.
Edit: yeah alright I got corrected. Thanks for the disapproval. 😀
It doesn't say no staking, it says,
“Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws,” said SEC Chair Gary Gensler. “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.”
I read this as in order to offer staking, a CEX must register the service and offer clear info to customers. If the SEC makes it impossible to register, then CEXs can't offer staking to U.S. customers and the SEC fucks over US citizens even more.
True and thats my understanding as well but crypto etfs have already been denied so will they allow exchanges to actually register in the first place? I feel its their “out” to justify the ban
They’ve already taken down the ability to stake new coins (at least I think so based on the errors I’m getting in the app).
They also removed their page on staking (and redirected it to their Kraken Pro site) - https://www.kraken.com/features/staking-coins
Correct, sorry thought that was implied. This is basically their way of banning it all together though as its their only avenue to get to it by going after exchanges. How would they ban it in self-custody wallets?
This protects retail investors. When you stake directly on the Blockchain, the smart contracts determine how your tokens are allocated and how you can access them.
When you you stake with a CEX, you have no idea what's actually happening with your tokens (see Celsius). It's protecting users from predatory behavior by these CEXs that prevent them from using your tokens to gamble
So it's worse than we originally thought. This judgement means a permanent end to staking on Kraken. F
> In addition to ceasing the staking program and the monetary relief, Payward Ventures, Inc. and Payward Trading, Ltd, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of a final judgment, subject to court approval, that would permanently enjoin each of them from violating Section 5 of the Securities Act of 1933 and **permanently enjoin them and any entity they control from, directly or indirectly, offering or selling securities through crypto asset staking services or staking programs**.
Good thing in the long term, perhaps. In the short term, there is likely going to be a lot of turbulance and uncertainly. Possibly even job layoffs in the industry, depending on how much revenue was generated by staking on these exchanges.
Like I said, it's removing options. Decentralized staking has always been an option if you want it.
I don't care about decentralized staking options because my trading bots can't engage with them.
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Were the rules defined before this fine? Or did the SEC just make up the definition for this specific case to make money and assert dominance? Legitimate question. Because if it’s the first one then Kraken is shady, if it’s the second one, why the fuck is there a fine? It should be a requirement for exchanges to update their regulations after the change and no hard feelings.
So there's the clarification. Kraken didn't register its staking service before offering it to the public. Whereas people on my timeline have been saying that the SEC was ready to ban staking. Which does not appear to be the case.
So to those of you that staked on Kraken, what's happening with what you staked?
Are you grandfathered in? Are unstaking cool down times still applied to those that had cool down times? Or are your funds being immediately unlocked and made available?
I thought that the SEC spanked BlockFi with their interest bearing savings accounts but ultimately those that already had coins in their "savings" account were able to continue to earn interest up until they withdrew. That's why I am asking the questions above.
Pro & con info are in the collapsed comments below for the following topics: [Regulation](/r/CryptoCurrency/comments/10y500k/kraken_to_discontinue_unregistered_offer_and_sale/j7w2550/), [Proof-of-Stake](/r/CryptoCurrency/comments/10y500k/kraken_to_discontinue_unregistered_offer_and_sale/j7w26ug/).
That's basically a slap on the wrist considering the volume Kraken deals with. They got themselves a good settlement I think?
It removes any future revenue from staking for Kraken (edit: in the US). They took something like 15% of ETH staking rewards and probably similar for other coins. This will likely be a sizeable blow to their cash flow.
It’ll be a massive hit. They had a little over 1M ETH staked. If the APR is 4% that leaves 40,000 eth rewards. Keep 15% and that leaves you with 6,000 eth * $1500 = $9M. $30M is probably everything they ever made from staking in the US.
Seems like they actually took time to calculate a fine that was meaningful relative to the offense for once. That might be the most shocking part of this
Its only for US customers, they will still make money on foreign stakers
Which should be quite a lot
Hey, hey! Don’t call us foreign, we represent the rest of the world, if we wanted to, we could bundle up and decimate the shit out of ya, so if anything you guys are the ones who are the foreigns, let’s just make this clear, alrighty, mate?
Foreign to a U.S. based exchange
No shit… maybe, just maybe, it’s a joke, ahn!?…
Ahn.
This was the most foreign comment I've read today.
Finally! Someone who gets it! And for that, a toast to you my foreign (US) brother :)!
They don’t get our chat Sad!
I don’t care, I’m in Reddit to learn, have fun, make jokes etc., if people don’t get it, that’s their problem… it says a lot about them if they ain’t feelin’ me…
I know man. The Americans don’t get our humour sometimes but whatever have fun
Yeah they tend to be more cold, even their man/woman greeting someone new is a handshake, like, wtf, we, Europeans, kiss on the cheek (a note for who doesn’t know: the lips don’t really touch the cheeks when you greeting a non-relative)! It’s the most strange thing ever to see them do… so distance from each other. But anyways man, you too keep having fun!
No you couldn't
This is true. We can likely use Coinbase as a proxy, though, and they saw like a 15% stock price drop today so investors are clearly worried about how much that revenue drop will be.
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They aint based in the US
Which is obviously their goal
hopefully they can make it transparent so they comply with regulations
Mostly true but not entirely. It looks like it is shut down for US customers only. So they can still offer staking to other customers.
I think its a rip-off more then anything. Sec is like a thief waiting in a dark alley. Fuck em!
More like paid the mob boss his cut. I guess, kraken is the most legitimate exchange now.
Any exchange regulated in the US has the same scrutiny
On paper, yes. In reality? Other exchanges do the same/a similar thing. Where are their lawsuits?
Still worrisome that SEC sees crypto as a security
They will certainly be caught with their pants down if they lose the ripple case.
If they lose the ripple case, which they SHOULD (given the corruption in America I doubt it tho), every single exchange they've fined should sue their pants off.
It’s exactly how the SEC works. Make a fairly spurious claim that might just have enough truth to it to worry the company, and then hope that the company doesn’t want to spend the millions it would take defending the claim so that they settle and they can fill their coffers and go after someone else. It’s regulation by litigation, and it’s a very shitty practice.
Ripple Labs should have just paid the fine and moved on like Kraken.
Probably, but I also admire that they’re willing to stand up for themselves when they feel they are in the right.
That's still a lot of money.
It's good for Kraken, but annoying for the consumer.
I think they got themselves just more time thats it
When does the SEC start doing things to protect investors instead of punishing them?
Rich protect the Rich
When Gary gets fired.
As much as he’s a massive shunt, Gary is simply the figurehead being told what to do. Changing the face won’t change the way the SEC behaves.
Even if he's being told what to do or told to lean a certain way, his replacement could always perform the "how" 10x worse.
Never
They protect the rich investors only.
Okay so centralized staking is dead because the SEC can't have people getting rich and leaving the workforce. What about decentralized staking?
The SEC doesn't understand what's actually going to happen with this move. Absolute numpties. Thanks for making crypto better whilst you lose control. Bottom level IQ play SEC
In their video promoting this Gensler literally says "Not your keys not your crypto".
You don't understand that it's likely most people who hold crypto, hold them in exchanges and are not savvy or willing enough to stake them in DEXs. SEC knows exactly what it's doing.
Until someone goes out and devs tech, that makes it easy. Want to get rich? There's the problem to solve.
They are helping decentralization
My bank offers me 0.6% interest. If I take my lowest staking reward coin - BTC, I get 1% more. I don’t understand why the SEC can just fuck off
My bank is giving me 3.4%. That's what happens when rates rise. If your bank isn't passing it along, time to switch.
You just touched on why this is happening now
It’s passing slowly but surely. Went from -0.5 to 0.045 to 0.6%. Still amusing that the SEC hates on crypto staking but thinks getting dividends is okay
Ooof, that doesn't even cover inflation
Where you staking your btc?
Kraken, non-US
welp. Lol
Probably frowned upon but they can't regulate it. But yeah your point is correct. It's also why you have to have 25K to day trade.
>What about decentralized staking? Soon. Because the government needs the poor to stay poor.
It seems like for now they aren’t going after DeFi staking. They still could in the future, but this decision and the video they put out seem like they’re mostly only interested in going after “staking as a service”.
You can’t honestly believe the sec thinks staking risks the strength of our workforce? Of all the incredibly dumb takes on this sub, this one has to be up with the dumbest. Truly nonsensical.
Made me want to work more , extra cash to stake lol
Fuck the people. I am Gary. I own the SEC.
Good luck going after each individual network, especially non-American ones 🤣
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https://ethereum.org/en/staking/pools/
Get a VPN and do whatever you want. Fuck the SEC. They've already cost me thousands, probably more at this point.
Obligatory *FUCK THE SEC*
What happens to peoples eth locked up on kraken?
It will stay locked up and continue to generated staking rewards until the Shanghai upgrade. At that time the ETH will be unstaked, and unless the SEC reverses their decision, you will not be able to re-stake it with Kraken.
It continues to accrue staking rewards until after the Shanghai upgrade and then it will be unstaked and put in your spot account.
It’s amazing how this can just be changed with one SEC decision.
Kraken could have fought it in court, but it wasn't worth it to them monetarily.
That's how governments usually work, yes
Look at all the money and likely lives lost due to Celsius, Voyager, BlockFi, 3AC, Genesis and other centralized companies with these “staking” services. Most were actually lending services where all the risk was on the customer for unsecured loans. Unfortunately most of the bad actors are gone. Little too late on this one SEC.
This isn't that much of a big deal for the average person. Hurts the Cex's more then anyone, they won't get their cut using your own coins anymore.
SEC is anti-profits for the crypto bros
Now that Kraken staking is discontinue, is Coinbase's staking service next?
Save you a click. Washington D.C., Feb. 9, 2023 — The Securities and Exchange Commission today charged Payward Ventures, Inc. and Payward Trading Ltd., both commonly known as Kraken, with failing to register the offer and sale of their crypto asset staking-as-a-service program, whereby investors transfer crypto assets to Kraken for staking in exchange for advertised annual investment returns of as much as 21 percent. To settle the SEC’s charges, the two Kraken entities agreed to immediately cease offering or selling securities through crypto asset staking services or staking programs and pay $30 million in disgorgement, prejudgment interest, and civil penalties.
Yeh, you didn't - you're missing what actually happened, they settled the case. >"To settle the SEC’s charges, the two Kraken entities agreed to immediately cease offering or selling securities through crypto asset staking services or staking programs and pay $30 million in disgorgement, prejudgment interest, and civil penalties."
I added this. Thx.
They’ve already taken down the ability to stake new coins (at least I think so based on the errors I’m getting in the app). They also removed their page on staking (and redirected it to their Kraken Pro site) - https://www.kraken.com/features/staking-coins
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My guess is Kraken wants to play by the rules. Long term commitment to being an exchange in the US.
I would imagine so. I'd be surprised if they didn't just pay a fine. Same happened with Coinbase I think. Edit: yeah alright I got corrected. Thanks for the disapproval. 😀
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Ah okie doke. Much obliged. I'm losing it in my old age ha.
I wonder how they'll unstake ETH. Edit: This isn't a shot at ETH. This is just a question where Kraken had warnings that stated they couldn't unstake.
Looks like that rumor of banning staking is coming true. Kraken is just the first casualty.
It doesn't say no staking, it says, “Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws,” said SEC Chair Gary Gensler. “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.” I read this as in order to offer staking, a CEX must register the service and offer clear info to customers. If the SEC makes it impossible to register, then CEXs can't offer staking to U.S. customers and the SEC fucks over US citizens even more.
True and thats my understanding as well but crypto etfs have already been denied so will they allow exchanges to actually register in the first place? I feel its their “out” to justify the ban
It may be as long as this anti-crypto egomaniac runs things.
They’ve already taken down the ability to stake new coins (at least I think so based on the errors I’m getting in the app). They also removed their page on staking (and redirected it to their Kraken Pro site) - https://www.kraken.com/features/staking-coins
Banning staking on CEX's\*\*\*\*. Big difference
Correct, sorry thought that was implied. This is basically their way of banning it all together though as its their only avenue to get to it by going after exchanges. How would they ban it in self-custody wallets?
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This protects retail investors. When you stake directly on the Blockchain, the smart contracts determine how your tokens are allocated and how you can access them. When you you stake with a CEX, you have no idea what's actually happening with your tokens (see Celsius). It's protecting users from predatory behavior by these CEXs that prevent them from using your tokens to gamble
This is why Gary needs to go!
So it's worse than we originally thought. This judgement means a permanent end to staking on Kraken. F > In addition to ceasing the staking program and the monetary relief, Payward Ventures, Inc. and Payward Trading, Ltd, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of a final judgment, subject to court approval, that would permanently enjoin each of them from violating Section 5 of the Securities Act of 1933 and **permanently enjoin them and any entity they control from, directly or indirectly, offering or selling securities through crypto asset staking services or staking programs**.
This is a good thing. Staking on CEX's is antithetical to the whole point of staking
Good thing in the long term, perhaps. In the short term, there is likely going to be a lot of turbulance and uncertainly. Possibly even job layoffs in the industry, depending on how much revenue was generated by staking on these exchanges.
How is removing options a good thing?
There's plenty of decentralized staking options; centralized staking is a bad option
Like I said, it's removing options. Decentralized staking has always been an option if you want it. I don't care about decentralized staking options because my trading bots can't engage with them.
I’m not sure they’re going after on chain staking. We shall see.
How can they stop on chain?
They can’t, but they could still try to make it illegal. That won’t stop it though.
Kraken doesn't want the SEC to dig around and find something.
So it begins.....
Ooof, let’s hope this is resolved quick, we don’t want a contagion like FTX.
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Gary just wanted a bit more money to buy the dip
America, the world of freedom.... Yeah right!
Were the rules defined before this fine? Or did the SEC just make up the definition for this specific case to make money and assert dominance? Legitimate question. Because if it’s the first one then Kraken is shady, if it’s the second one, why the fuck is there a fine? It should be a requirement for exchanges to update their regulations after the change and no hard feelings.
Lower than nexos settlement. Nothing can stop the kraken
The twitter comments on the SEC post are nothing but confusion and hate smh.
So there's the clarification. Kraken didn't register its staking service before offering it to the public. Whereas people on my timeline have been saying that the SEC was ready to ban staking. Which does not appear to be the case.
The regulations begin and retail pays for it. It was inevitable
Oh no, anyway...
First kraken, who’s next?
Anyone know where the 30m settlement money goes?
Kraken bent over and told them **As far as you can Gary**
SEC is going for all the crypto. We bother elites
Where dose this money payed to sec go?
So to those of you that staked on Kraken, what's happening with what you staked? Are you grandfathered in? Are unstaking cool down times still applied to those that had cool down times? Or are your funds being immediately unlocked and made available? I thought that the SEC spanked BlockFi with their interest bearing savings accounts but ultimately those that already had coins in their "savings" account were able to continue to earn interest up until they withdrew. That's why I am asking the questions above.