Why did Kraken shut down its cryptocurrency staking service?
Crypto exchange Kraken agreed to shut down its U.S. cryptocurrency staking service and pay $30 million in penalties to settle U.S. Securities and Exchange Commission charges that it failed to register the program, the agency said on Thursday, in a move that could cause headaches for platforms with similar offerings.
What is Kraken and how does it work?
Kraken offers its customers the ability to "stake" certain crypto tokens in order to earn rewards. Its website advertises that users can earn up to 20% in annual yield if they pledge to lock up their assets for a certain period of time. The San Francisco-based platform did not admit or deny the allegations in the SEC's complaint.
What is the SEC's first crackdown on staking?
The settlement marks the SEC's first crackdown on staking, a common service offered at both centralized and decentralized crypto exchanges, including most of the major exchanges in the United States such as Coinbase (COIN.O) and Binance US.
