Kraken co-founder on lawsuit: crypto staking matters

Yesterday we wrote that the crypto exchange Kraken has lost a lawsuit with the US Securities and Exchange Commission (SEC). Company must now stop staking cryptocurrencies as Kraken would be offering unregistered securities with staking. Kraken co-founder Jesse Powell responds to the results.

Kraken ends crypto strike: will the rest follow?

The SEC has fined the crypto exchange $30 million. For now, the company will stop offering strike altogether. The crypto industry reacted strongly to the result, zi think so staking is an important part of the crypto world. Banning the technique could result in the security of many blockchains being compromised. So there is a lot at stake.

It could ensure that strikes for retail investors are completely banned. Funnily enough, the SEC mentions that the goal is to protect small investors. There may be an exception for institutes, although this is not clear. The policymaker also seems to consider it legal if the strike contracts are registered as securities.

Coinbase is also concerned. Recently, Coinbase CEO Brian Armstrong stated that he thinks a strike ban could kill the crypto industry in the United States. sMeanwhile, the result does not appear to have any consequences for the trading volume on Kraken. In fact, volume increased 14% to $757 million.

Kraken co-founder Powell wants justice

Krakens co-founder and former CEO Jesse Powell wrote on Twitter after the result that he hopes someone will take on the SEC. “I hope someone proves there is a legal, user-friendly way to get consumers to strike in the US. It will be a terrible, long and expensive lawsuit, but the industry and the US would be very grateful for it.”

He also says he has not continued with the lawsuit because of ‘risk-adjusted return’ – so it would have been too expensive to continue, and the risk of Kraken losing was too great.

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Last he notes that the SEC appears to have taken advantage of the situation. The institution has waited until the bottom of the bear market and until Kraken has had to lay off 30% of its employees. “They have all our financial results, maybe we came across as weak. A bigger balance wouldn’t have hurt either,” said Powell.

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