These crypto companies can also be sued by the SEC

The U.S. Securities and Exchange Commission (SEC) fined crypto exchange Kraken $30 million yesterday and forced it to stop its staking product. According to many, this could mean that other crypto companies will also be sued by the SEC. In this article you can read whether the company is next to be sued.

Kraken does not resist

In an announcement on Thursday, the regulator announced that Kraken had failed to register its crypto staking program with the SEC.

In a series of tweets, Jesse Powell, Kraken’s co-founder and CEO, stated that he hopes there will be an exchange that defies the SEC. However, he said that will be a long and expensive fight. Kraken chose not to fight the case in court and settled with the SEC.

Will the SEC Target Coinbase?

SEC Chairman Gary Gensler noted that the action is intended to make it clear to the market that staking service providers must register. Otherwise, the SEC will come after them. This has sparked great concern within the crypto industry and has raised many questions about who the SEC will pursue next.

As the largest US exchange, Coinbase appears to be a potential target. Following the news, COIN shares fell 14%.

According to Paul Grewal, Coinbase’s Chief Legal Officer (CLO), the SEC is unlikely to attack his company. Grewal explained this via Twitter, as Kraken’s products were essentially revenue products. “True on-chain staking services like ours are fundamentally different,” said Grewal.

Should the SEC choose to attack Coinbase, the exchange is ready to take on the battle, the CEO says.

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Who’s next on the SEC’s list?

Exchanges are not the only ones that will be the focus of the new regulations. At this point, it is not known whether proof-of-stake based cryptocurrencies such as Ethereum are also the focus of the SEC.

Rumors are circulating that the SEC will conduct multiple enforcement actions. Samuel Andrew has reported that several exchanges and stablecoin issuers can expect to face charges in the coming days and weeks.

One rumor has already been confirmed: the New York Department of Financial Services (NYDFS) is investigating the stablecoin company Paxos. The scope of the investigation has not yet been revealed, but Pax Dollar (USDP) and Binance USD (BUSD) are among the stablecoins the company issues and may therefore be the subject of the investigation.

Another name that came up was Circle. The issuer of the second largest stablecoin in the crypto market, USDC. This company may also have to deal with the SEC.

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