Kraken CEO Jesse Powell and Coinbase Chief Legal Officer Paul Grewal have been vocal in their criticism of the US Securities Exchange (SEC)’s latest enforcement action against cryptocurrency staking.
SEC Chairman Gary Gensler Said In an interview with CNBC, Kraken said it had not disclosed to the public the full risks associated with staking digital assets on its platform.
Gensler said Kraken “knew how to register” on the SEC’s website for the necessary regulatory requirements, but failed to do so.
Powell, on the other hand, suggestive Gensler’s claims were untrue.
“Oh, all I had to do was fill out a form on the website and tell people that the staking reward comes from staking? , I wish I had seen this video before agreeing to completely shut down service in the U.S. How silly I look.
Coinbase’s Chief Legal Officer, Paul Grewal, is also on board, addressing some of the common questions about cryptocurrency staking.Greval To tell Regardless of SEC scrutiny, staking is a necessary and legitimate form of investment for digital asset holders.
“Question: Does the underlying crypto protocol really create value for investment, or is it a new token that dilutes the value of the tokens you already have?
A: Staking is a way to earn rewards by securing the blockchain. Most networks that rely on staking (including all we support) reward users with their own tokens that increase and decrease in value like any other digital asset.
Rules and rulemaking can handle all of this. After all, that’s why Congress passed the Administrative Procedure Act in the first place. Mandatory regulation is a poor alternative. “
Cardano (ADA) creator Charles Hoskinson has addressed the seemingly unclear SEC stance on cryptocurrency staking. Hoskinson says the SEC may have basically declared the structure of Kraken’s staking service to be in violation of regulation, but not the underlying assets themselves. I said it is possible.
“Obviously there will be national discussions about these things, especially now that Kraken and others are involved. It seems that there is no attempt to becomeyou will probably see a lot of FUD [fear, uncertainty and doubt] Twitter, Reddit, and elsewhere said, “Well, if staking is security, it must mean that the underlying asset is security. So Ether is now security. Or ADA is now Security.
To be clear, you can put commodity wheat or commodity gold into some kind of packaging or structuring. That package is a security and the activities you do with it are regulated. However, this does not mean that wheat and gold are securities. Therefore, by doing it in a stake pool, there is no transitivity that can be inferred that there is something wrong with the underlying asset. I don’t see any attempt to do that at this time. “
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Featured Image: Shutterstock/Mia Stendal