Kraken move should put crypto industry ‘on notice,’ says Gary Gensler

• Gary Gensler said the authorities’ actions against crypto exchange Kraken yesterday “should alert people.

• He added that crypto companies need to exercise caution and stay compliant.

• The crypto space needs laws to protect investors.

Gensler Says Crypto Space Needs Regulation

Securities and Exchange Commission (SEC) Chairman Gary Gensler said in an interview with CNBC that the cryptocurrency industry needs regulation to protect investors.

The storefronts and casinos where people are investing must adhere to and untangle bundled products. Business models are full of conflict, said the SEC Chairman. @GaryGensler upon #CryptIf this sector has any chance of survival, we need laws to protect investors. pic.twitter.com/FGRrYE1Aov

Squawk Box (@SquawkCNBC) February 10, 2023

Gensler referred to this following the regulators recent crackdown on the Kraken cryptocurrency exchange.

On Tuesday, the Kraken announced that it End of crypto staking service Settle with the US SEC.While commenting on this latest cryptocurrency newssaid Gensler.

Whether you call it lending, earning or yield, it should really be on everybody’s radar in this market, whether it’s offering a so-called Annual Yield (APY).

Gensler added that cryptocurrency intermediaries must provide appropriate disclosures and safeguards required by securities laws when providing cryptocurrency services such as lending and staking. he added it.

“These other platforms should be aware of this and pursue compliance.”

SEC Commissioner Hester Pearce disagrees with Gensler’s move

Hester Pierce, one of the most popular SEC commissioners, disagreed with the agency’s decision after Kraken’s transaction. The crypto-friendly commissioner said:

Using enforcement action to tell people what the law is in an emerging industry is not an efficient or fair way of regulation. Coercive action and boilerplate analysis are not enough, and paternal lazy regulators settle for this reconciliation-like solution.

Gensler responded that for decades, the SEC has used tools provided by Congress to protect investors. He added that the agency can take enforcement action to protect investors if someone is breaking or violating the law.

Some crypto pundits called the move by the SEC a bad sign for the staking-as-a-service currently offered to US investors.

Earlier this year, the SEC indicted Gemini and Genesis for offering and selling unregistered securities through the Gemini Earn Lending Program.