U.S. Securities and Exchange Commission Chairman Gary Gensler has issued a warning to “break the law and follow the law” after crypto companies announced a settlement with crypto exchange Kraken.
Gensler on CNBC’s “Squawk Box” Feb. 10 Said Cryptocurrency exchanges claim to be required to register with the SEC in order to comply with U.S. regulations, and many within the industry have “chosen” not to do so. The SEC chairman has argued that the business models of many crypto projects were “ridden with conflict” and that bundled products needed to be “unraveled.”
“If there is any chance of survival and success in this space, it is well-established rules and laws to protect investors,” said Gensler. “Don’t put your hands in your customers’ pockets by using their money for your platform.”
“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 #Crypt“If this sector has any chance of survival, we need laws to protect investors.” pic.twitter.com/FGRrYE1Aov
— Squawk Box (@SquawkCNBC) February 10, 2023
Gensler’s statement comes after the SEC announced it had reached a settlement with Kraken, in which the exchange suspended staking services and programs for U.S. customers, paid $30 million, and received a judgment. I agreed to pay the previous interest, and civil penalties. Kraken said it will continue to offer staking services to users outside the United States through a separate subsidiary.
Related: Community Urges Coinbase To Relist XRP As CEO Fights For Staking
Many have criticized the SEC settlement for taking action against companies that need to navigate the regulatory space without clear guidelines. SEC Commissioner Hester Peirce called the SEC’s actions “lazy and paternal” and said the staking program “has served people well.”