{"id":10301,"date":"2023-02-11T00:06:10","date_gmt":"2023-02-11T00:06:10","guid":{"rendered":"https:\/\/cryptoheretostay.com\/?p=10301"},"modified":"2023-02-11T00:06:11","modified_gmt":"2023-02-11T00:06:11","slug":"midnight-massacre-sec-crackdown-on-crypto-staking-services-prompts-speculation-of-further-enforcement-actions","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=10301","title":{"rendered":"\u2018Midnight Massacre:\u2019 SEC Crackdown on Crypto Staking Services Prompts Speculation of Further Enforcement Actions"},"content":{"rendered":"<p> <script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<\/p>\n<p><strong>On Feb. 9, 2023, the cryptocurrency community learned of the U.S. Securities and Exchange Commission\u2019s (SEC) crackdown on staking services. The SEC fined Kraken, a cryptocurrency exchange, $30 million for offering an \u201cunregistered offering\u201d related to its U.S. staking service. Digital currency advocates are now debating what constitutes a yield product versus a noncustodial solution that is not considered a security. Fox News journalist Eleanor Terrett predicts more regulatory crackdowns on the crypto space in the coming weeks, including enforcement actions against exchanges and banks.<\/strong><\/p>\n<h2>Observers Weigh in on the Future of Crypto Staking After SEC Crackdown<\/h2>\n<p>There is much discussion regarding the recent actions taken by the top U.S. securities regulator against crypto exchange Kraken and its staking service. The day before, Brian Armstrong, CEO of Coinbase, warned that he had heard rumors the SEC would attempt to eliminate cryptocurrency staking for retail customers in the United States. The next day, Kraken announced it was ending staking services for U.S. customers. The SEC, chaired by Gary Gensler, disclosed that the regulator settled with Kraken over the issue for $30 million for civil penalties and disgorgement.<\/p>\n<p>On Thursday, Gary Gensler emphasized that cryptocurrency exchanges must comply with regulatory policies when offering investment vehicles to retail customers in the United States. During an interview with CNBC\u2019s \u201cSquawk Box\u201d on Friday, Gensler repeated this stance. \u201cCompanies like Kraken can offer investment contracts and investment schemes, but they must provide full, fair, and truthful disclosure,\u201d Gensler said. \u201cThis protects the investors who watch your program. That\u2019s the basic law, and they were not following it.\u201d<\/p>\n<p>The enforcement actions have sparked discussions about what constitutes a yield product versus a noncustodial solution that is not considered a security. Economist and trader Alex Kr\u00fcger weighed in. \u201cPositive narrative spin for later,\u201d Kr\u00fcger tweeted. \u201cBanning U.S. exchanges\/custodians from offering staking services will push staking offchain or abroad, making Ethereum decentralized and beyond the reach of U.S. regulators. Decentralized Ethereum is better Ethereum.\u201d<\/p>\n<h2>Fox News Reporter Told Imminent Regulatory Enforcement Actions Against Crypto Exchanges, Banks, and Token Issuers Coming Shortly<\/h2>\n<p>SEC commissioner Hester Peirce expressed a dissenting opinion and disagreed with the actions. Peirce said it was \u201cmost concerning\u201d that the SEC\u2019s \u201csolution to a registration violation is to shut down entirely a program that has served people well.\u201d The commissioner emphasized that \u201ca paternalistic and lazy regulator settles on a solution like the one in this settlement: instead of initiating a public process to develop a workable registration process that provides valuable information to investors, it simply shuts it down.\u201d<\/p>\n<p>According to Coinbase chief legal officer Paul Grewal, Coinbase\u2019s staking service is different. \u201cCoinbase\u2019s staking program is not affected by [Thursday\u2019s] news,\u201d Grewal explained in a statement. \u201cWhat\u2019s clear from [Thursday\u2019s] announcement is that Kraken was essentially offering a yield product. Coinbase\u2019s staking services are fundamentally different and are not securities.\u201d In addition to the latest crackdown on staking, rumors are circulating that more regulatory enforcement is on the horizon.<\/p>\n<p>On Thursday, Fox News reporter Eleanor Terrett reported that more regulatory action is expected to impact the cryptocurrency industry in the coming weeks. Terrett tweeted, \u201cSCOOP: Gary Gensler is embarking on a \u2018midnight massacre\u2019 to bring all of crypto under his control. In the coming weeks, the SEC, New York\u2019s Department of Financial Services, and the Office of the Comptroller of the Currency will bring enforcement actions against exchanges, banks, and entities that mint tokens in an attempt to label most of them as securities. I\u2019m told Gensler\u2019s strategy is to bring as many enforcement actions as possible while the 118th Congress is still getting settled.\u201d<\/p>\n<p>Tags in this story<\/p>\n<p>118th Congress, Alex Kruger, banks, Brian Armstrong, bring enforcement actions, bring under control, coming weeks, comptroller of the currency, Cryptocurrency, cryptocurrency industry, Eleanor Terrett, enforcement actions, Exchanges, Financial Services, Fox News, Gary Gensler, Gary Gensler&#8217;s strategy, getting settled, hester peirce, label securities, midnight massacre, New York&#8217;s Department of Financial Services, Office of the Comptroller of the Currency, Regulatory, regulatory action, regulatory crackdown, rumors circulating, SEC, Securities, Squawk Box, staking services, token issuers, token minting<\/p>\n<p><em><strong>What do you think the future holds for cryptocurrency in the face of increased regulatory enforcement actions? Share your thoughts and opinions in the comments below.<\/strong><\/em><\/p>\n<p>Jamie Redman <\/p>\n<p class=\"article__body__author__info__about\">\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.<\/p>\n<p><i class=\"td-icon-font td-icon-twitter\"\/><\/p>\n<p class=\"images_credits\"><em>Image Credits: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n<p><strong>Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<p>More Popular NewsIn Case You Missed It<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/news.bitcoin.com\/midnight-massacre-sec-crackdown-on-crypto-staking-services-prompts-speculation-of-further-enforcement-actions\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On Feb. 9, 2023, the cryptocurrency community learned of the U.S. Securities and Exchange Commission\u2019s (SEC) crackdown on staking services. The SEC fined Kraken, a cryptocurrency exchange, $30 million for offering an \u201cunregistered offering\u201d related to its U.S. staking service. Digital currency advocates are now debating what constitutes a yield product versus a noncustodial solution [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10302,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[1],"tags":[],"class_list":["post-10301","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-updates"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10301"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10301\/revisions"}],"predecessor-version":[{"id":10303,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10301\/revisions\/10303"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/10302"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}