Kraken is removing staking for US users and will pay a $30 million fine to settle a conflict with the SEC.
News about Kraken does not affect staking at Coinbase in any way - the service will be provided to investors.
The popular American crypto exchange Kraken has agreed to settle a conflict with the US Securities and Exchange Commission (SEC). It is stopping its staking product for US users and will pay a fine of $30 million.
“Today’s actions should send a clear message to the market that staking providers must register, fully disclose information, and protect investors,” said SEC Chairman Gary Gensler.
The SEC stated that staking is a process in which investors lock up or “stake” their crypto tokens in order to receive rewards through the Proof-of-Stake consensus algorithm. Investors lose control of their tokens and take on the risks associated with platforms with weak security.
The exchange will continue to provide staking services to clients from other countries through its subsidiary.
The information comes a day after Coinbase CEO Brian Armstrong announced the SEC's desire to ban staking in the US.
“I hope that’s not the case because that would be a terrible path for the United States,” Armstrong said.
Amid the release of news about Kraken, shares of Coinbase, which is the largest in the United States and one of the largest exchanges in the world, fell by 14%. However, the exchange's general counsel, Paul Grewal, said the Kraken situation had no impact on Coinbase.
“Today's news has no impact on the Coinbase staking program. Kraken offered a profitable product, Coinbase’s staking services are fundamentally different and are not securities,” he noted.
