SEC Probes Crypto Giant Kraken for Illegally Trading Unregistered Securities
The U.S. Securities and Exchange Commission (SEC) has launched an investigation into crypto exchange Kraken, examining whether the company illegally traded unregistered securities.
The investigation is reportedly close to a conclusion, with a possible settlement coming in the near future. However, which tokens or products are at the center of the probe remains unknown.
Bitcoin Prices Slip as Investigation Unfolds
As news of the SEC’s investigation into Kraken spread, Bitcoin (BTC) saw a dip in value, down more than 3.5% to $22,596 at the time of writing. The outcome of this investigation could have broader implications for the crypto sector, with a settlement potentially putting pressure on other crypto firms to resolve any similar issues with the SEC.
SEC Chair Signals Increased Enforcement Against Crypto Firms
The SEC has made clear that the majority of tokens being offered in the crypto space should be considered securities and subject to the agency’s rules. This increased enforcement comes after the recent implosion of crypto firm FTX, leading SEC Chair Gary Gensler to signal the agency would take a more aggressive approach against crypto firms that have not registered with the SEC.
READ MORE: Ethereum (ETH) Positioned For a Correction?
Coinbase CEO Criticizes Potential Crackdown on Crypto Staking
As the SEC’s investigation into Kraken continues, the CEO of U.S. crypto exchange Coinbase, Brian Armstrong, spoke out against the potential crackdown on crypto staking by the SEC. Armstrong believes that staking, which allows users to participate in the running of open crypto networks, is a crucial innovation in the crypto space and should not be considered a security.
2/ Staking is a really important innovation in crypto. It allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.
— Brian Armstrong (@brian_armstrong) February 8, 2023
He warns that without clear rules and regulations, exchanges may leave the U.S. and that it is essential for financial services and web3 capabilities to grow in the country for national security reasons.