What you need to know about the SEC crackdown on crypto stacking

The Securities and Exchange Commission (SEC) has charged Kraken, a well-known crypto asset trading platform, with failing to register its crypto asset staking-as-a-service program. The charges come after the SEC found that Kraken has been offering and selling its staking services to the general public since 2019. As part of the settlement, Kraken has agreed to immediately stop offering staking services and pay $30 million in penalties and other charges.

According to the SEC's complaint, these staking services were not properly registered and investors were not provided with the necessary disclosures and safeguards required by securities laws. This has resulted in investors being exposed to risks without proper protection.

SEC Chair Gary Gensler has stated that this case should serve as a warning to the market that staking-as-a-service providers must comply with securities laws and provide proper disclosures and safeguards to investors.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, added that this action is another step in protecting retail investors from companies offering crypto investments outside the protections provided by federal securities laws.

As part of the settlement, Kraken has agreed to permanently stop offering staking services and to enter into a final judgment that would prevent it from violating securities laws in the future.