Kraken CEO Calls on Congress to Protect US Crypto Industry Following Settlement With SEC Over Staking Program

The CEO of crypto exchange Kraken, Jesse Powell, has called on Congress to pass a law to protect the U.S. crypto industry after the Securities and Exchange Commission (SEC) took action against his trading platform over its crypto staking service.

Kraken’s CEO Responds to SEC Action

Kraken CEO Jesse Powell urged Congress to pass a law to protect the domestic crypto industry on Thursday after the U.S. Securities and Exchange Commission (SEC) charged his crypto trading platform over its staking service.

The Kraken boss tweeted:

Congress must act to protect the domestic crypto industry and U.S. consumers who will now be going offshore to obtain services no longer available in the U.S.

As part of the settlement with the securities regulator, Kraken agreed to end its crypto staking program for U.S. clients and pay $30 million in disgorgement, prejudgment interest, and civil penalties.

Kraken clarified in a blog post on Thursday:

Staking services for non-U.S. clients will continue uninterrupted. Non-U.S. clients can continue to stake and unstake assets, as well as automatically earn and stake rewards, as usual.

Following the securities watchdog’s enforcement action over Kraken’s staking program, SEC Commissioner Hester Peirce issued a statement disagreeing and dissenting from her agency’s action. “A paternalistic and lazy regulator settles on a solution like the one in this settlement: do not initiate a public process to develop a workable registration process that provides valuable information to investors, just shut it down,” she wrote.

Responding to Commissioner Peirce’s statement, Powell tweeted, “Some guidance would be appreciated.” He added that the SEC’s approach of “This is wrong but I won’t tell you how to do it right. Want to find out if X works? Try it and see what happens” does not help the crypto industry or consumers. “We aren’t anti-regulation but we need a clear path to operate,” he stressed.

In a follow-up tweet, the Kraken executive opined:

I honestly hope that somebody proves, in court, that there is a legal, user-friendly version of custodial staking that can be offered to U.S. consumers. It’ll be a brutal, lengthy, expensive fight and a massive distraction but the industry and the USA will be extremely grateful.

What do you think about the SEC going after crypto staking programs at exchanges? Let us know in the comments section below.