“Not your keys, not your crypto”

In a video, US Securities and Exchange Commission Chairman Gary Gensler tried to impose new limits on staking in a positive light. February 9.

Gensler says disclosure benefits investors

In the “Office Hours” series on YouTube, Gensler said:

“By signing the dotted line or agreeing to the terms and conditions, you generally agree that placing your tokens with these providers means transferring ownership to them.”not your keys There is an expression “not your crypto”.

Many investors are cautious when depositing funds on centralized exchanges and use the very tagline as a reminder that exchanges may restrict access to their funds. doing.

Gensler said similar concerns should extend to staking programs offered by exchanges and other companies. He said investors should consider whether centralized services are really betting deposited assets. Some services may lend out deposited assets or mix assets with other businesses. Other services may not provide investors with a fair return or may dilute the value of assets already held by investors.

Gensler added that these concerns apply to all named staking programs and interest-bearing products, including earn, reward, and APY programs.

He said the lack of adequate disclosures widely means that investors currently have no way of finding answers to the above questions and concerns. This is why the SEC wants companies to comply with securities laws, he said.

Concerns over staking ban spread

Gensler’s statement implies that cryptocurrency companies can comply with regulations, but the SEC’s sudden decision to impose unclear rules could effectively result in a ban.

SEC Commissioner Hester Peirce voiced that concern today. After Kraken announced it was suspending its US staking service as part of his SEC settlement, Peirce wrote that Kraken may not have been able to register properly.

she said Crypto applications “failed to make it through the SEC’s registration pipeline” and are concerned that the SEC has shut down a service that “has been serving people well.”

Elsewhere, Coinbase CEO Brian Armstrong said he had heard the SEC wanted to “end up crypto staking for retail customers in the US.”

Paul Grewal Chief Legal Officer told Bloomberg Today, Coinbase will continue to offer a staking service, which is different from Kraken’s, he said. Unverified rumors also suggest that Coinbase could fight the SEC if it tries to interfere with the service.

These developments show that the SEC is taking a tough stance on staking. Still, the SEC may eventually be able to create a situation where staking services can operate.

Current rules appear to leave room for decentralized on-chain staking on blockchains such as Ethereum, but the SEC has not explicitly endorsed the practice.

Posted In: People, Regulation

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