Bitcoin Price Retreats Amid Reports of Kraken Probe, Rumors of SEC Attack on Staking
Bitcoin (BTC) is falling in price on the news that the US Securities and Exchange Commission (SEC) has opened an investigation into Kraken over whether it illegally traded unregistered securities.
According to Bloomberg, the SEC is investigating Kraken, the third largest crypto exchange in the world, for possible violations of securities regulations when offering certain products to those living in the United States.
Bitcoin is worth $22,596 at the time of writing, down more than 3.5% from its high the day before the report was published.
According to the report, the investigation could be nearing its end with a possible settlement coming within days. Which tokens or other products triggered the SEC probe remains unknown.
The US-based exchange offers customers around 185 different cryptocurrencies to invest in, as well as the ability to stake their holdings for rewards.
Bloomberg predicts that any settlement will have broader implications for the crypto sector.
says the report,
“A settlement with the SEC could push other crypto firms to hash out deals with the regulator, which has repeatedly said most of the tokens on offer are securities that should be subject to the agency’s rules.”
Following FTX’s implosion in November, SEC Chairman Gary Gensler said his agency would become more aggressive in its enforcement of crypto firms that have not registered with the SEC.
Meanwhile, the head of US-based crypto exchange Coinbase is Brian Armstrong criticize any potential move by the SEC to crack down on crypto betting.
“We’re hearing rumors that the SEC wants to get rid of crypto betting in the US for retail clients. I hope that’s not the case, as I think it would be a terrible road for the US if that were to happen.”
Armstrong says staking is essential to the crypto sector.
“Staking is a very 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.”
He too says that the SEC should not consider imposing a security and that the federal agency should adopt rules that promotes the crypto sector, otherwise he says exchanges will leave the US.
“We need to make sure that new technologies are encouraged to grow in the US, not stifled by a lack of clear regulations. In the case of financial services and web3, it’s a matter of national security that these capabilities are built out in the US.
Regulation by enforcement does not work. It encourages companies to operate offshore, which is what happened with FTX.
Hopefully we can work together to publish clear rules for the industry, and come up with sensible solutions that protect consumers while safeguarding innovation and the national security interests of the United States.”
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Featured image: Shutterstock/IvyStock/David Sandron
