The end of crypto staking in the US? | NFT CULTURE | Web3 Culture NFTs and Crypto Art
Cryptocurrency staking refers to the process of holding and supporting a specific cryptocurrency network by unlocking one’s coins as collateral. This process helps secure the network and in return rewards the player with more coins. However, the future of crypto betting in the US is currently in jeopardy.
This was brought to light by a tweet from Coinbase CEO, Brian Armstrong, who expressed concerns about rumors that the SEC wants to eliminate crypto betting for retail customers in the US. Armstrong stated that such a move would be a “terrible path” for the country and that regulation through enforcement does not work, as it often pushes companies to operate offshore. He also expressed hope that the industry could work together to establish clear rules and find solutions that protect consumers while preserving innovation and the national security interests of the United States.
SEC settles with Kraken after strike ends
In addition, Kraken has reportedly agreed to shut down its cryptocurrency betting operation to resolve charges with the US Securities and Exchange Commission (SEC), according to a source familiar with the matter. The SEC is expected to hold a private meeting on Thursday to discuss and vote on the settlement, with a potential announcement to follow later in the day, according to the same source. Kraken’s spokesperson declined to comment on the matter, while the SEC also declined to provide any comment after the publication of this article. The staking service offered by Kraken, which included a crypto lending product with up to 24% returns, is also expected to close as part of the settlement.
It was recently reported by Bloomberg that Kraken was close to a settlement with the SEC over allegations of offering unregistered securities. This comes a day after Coinbase CEO Brian Armstrong tweeted about rumors that the SEC would bar retail customers from participating in the strike. The SEC declined to comment on Armstrong’s comments. In his tweet, Brian Armstrong refers to an article from “Paradigm.xyz” that explains why Ethereum’s new staking model does not make ETH a security, suggesting that the staking mechanics of Ethereum is a key factor in determining whether it should be classified as a security.
SEC Chairman Gary Gensler has previously stated that he believes betting through intermediaries, such as Kraken, may fall under the definition of securities in US law, as it is similar to lending. The SEC has previously taken similar measures and settled cases with lending companies, including the now bankrupt lender BlockFi.
A settlement with Kraken would be a significant victory for the SEC as it continues its efforts to regulate the crypto industry. According to data from Dune Analytics, the majority of Ethereum players use staking services. Following the publication of this article, the crypto market saw a drop, with Ethereum falling 4.5% in the first 30 minutes.
Brian Armstrong has strong views on the role of striking in the United States.
1/ We hear rumors that the SEC wants to get rid of crypto betting in the US for retail customers. I hope that is not the case, as I think it would be a terrible path for the United States if it were allowed to happen.
— Brian Armstrong (@brian_armstrong) 8 February 2023
