No products in the cart.
- Latest
- Trending
ADVERTISEMENT
Input Output (IO) CEO Charles Hoskinson has argued that the SEC was right to pursue Kraken regarding its staking program.
inside live stream On the Feb. 14 broadcast, Hoskinson detailed SEC-Kraken’s enforcement actions.Notifying him of his comments is the actual Complaint filed in the district court by the regulator.
Based on his interpretation of the document, he understood that regulators had no problem with staking. However, this is not the case for our in-house exchange staking program.
The SEC posted a press release on February 9 announcing its settlement with Kraken over allegations that Kraken failed to register its staking program as a security offering.
The settlement agreement required the exchange to end its staking program for US customers and pay a $30 million fine. In response, some in the cryptocurrency community interpreted this as a crackdown on staking and an attack on the cryptocurrency industry.
but, Hoskinson He noted that the SEC complaint focused on Kraken’s “protocol deviations” and not staking per se. Further, Hoskinson argued that the issues raised were valid grounds for complaint.
“If you actually read the documents and the complaint, they’re actually saying that what you did was a protocol deviation and that you built your own in-house product.”
Explaining what this means, the CEO of IO said that for staking directly with Cardano, the delegator would send ADA tokens to the stake pool operator (SPO) of their choice under a non-custodial liquidity model. said that it is necessary to pledge
This model allows the delegator to retain access to the tokens, prevent the SPO from controlling the funds, and allow the user to leave the SPO at any time. However, staking Cardano through Kraken means that the user is giving up her right of custody of her ADA, the right to make decisions, and is left in the dark about what happens with her funds. .
“What they’re saying here is you don’t make any decisions. The Kraken makes all these decisions. They do all the work and they control all the money.” and get a passive return from it.
The SEC has determined that staking on its own and staking on Kraken are two different things.Kraken has determined that third-party custody risk, management risk, and how its reserve pool/liquidity system works should be properly managed. It is considered unfavorable because it has not been disclosed to
They say there is liquidity, but the protocol doesnt really give liquidity any meaning. You have to chop the pie, you have to get a collection of pies to create a reserve pool. It’s not clear how they do it under the hood.”
In summary, the court filings did not (explicitly) raise the issue of direct protocol staking. Instead, it was clear that regulators were focusing on Kraken’s in-house staking product, which posed additional risks to users via protocol deviations.
