The Bitcoin Price Falls as News of a Kraken Investigation and Talk of an SEC Attack on Staking Spreads
The announcement that Kraken is under investigation by the U.S. Securities and Exchange Commission (SEC) for potentially trading unregistered securities has caused a decline in the price of bitcoin (BTC).
Bloomberg reports that the SEC is looking into Kraken, the third biggest cryptocurrency exchange in the world, for potentially violating securities laws by making some products available to residents of the United States.
At the time of writing, one bitcoin is valued $22,596, down more than 3.5 percent from its all-time high the day before the study was released.
The probe, the story claims, is winding down, and a settlement might be reached within days. It is unclear what kind of coins or items prompted the SEC to start looking into the company.
About 185 different cryptocurrencies are available for trading on the US-based exchange, and users may also stake their holdings for incentives.
According to Bloomberg, the crypto industry as a whole will be affected by whatever resolution is reached.
To quote the report, With the SEC maintaining its position that the majority of the tokens being issued are securities, a settlement with the agency might put pressure on other crypto businesses to negotiate with the agency.
Following the November collapse of FTX, SEC chairman Gary Gensler pledged tougher enforcement action against unregistered crypto businesses.
On the other hand, Coinbase’s CEO Brian Armstrong is slamming any attempt by the SEC to regulate crypto staking.
“There have been rumblings that the SEC would want to see the end of crypto staking in the United States for ordinary investors. In my opinion, it would be a disastrous course for the United States, therefore I really hope that is not the case.”
Armstrong maintains that staking is a crucial part of the cryptocurrency ecosystem. “I believe that staking is one of the most significant developments in the history of cryptocurrency. It facilitates end-user engagement in the management of public key infrastructure. Scalability, enhanced security, and lower carbon footprints are just a few of the numerous benefits that staking brings to the table.”
He claims Exchanges would leave the United States if the SEC even considers classifying staking as a security, and he urges the federal agency to enact policies that benefit the cryptocurrency industry.
We need to ensure that the development of cutting-edge technology in the United States is fostered, rather than stunted, due to a lack of regulation. It is crucial to the nation’s safety that the infrastructure for web3 and financial services be developed in the United States.
Regulation by punishment is ineffective. Like FTX, it drives businesses to set up shops in other countries. With any luck, we’ll be able to collaborate on publishing transparent guidelines for the sector and developing reasonable solutions that safeguard consumers without compromising innovation or US national security.
Also Read: A BNY Mellon executive believes digital assets are here to stay
