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Seeking Alpha 2023-02-09 20:49:41

Crypto exchange Kraken shuts down staking program to settle SEC charges

Kraken on Thursday has agreed to immediately end its cryptocurrency asset staking-as-a-service program and will pay $30M to settle charges with the U.S. Securities and Exchange Commission. The complaint alleged that Kraken failed to register the offer and sale of its staking program, which allowed investors to lock up -- or "stake" -- crypto assets on Kraken in exchange for advertised annual investment returns of as much as 21%. The exchange, which allegedly touted its sizable investment returns and payouts, has been offering such services since 2019, the regulator said. Investors lose control of the tokens they provide to Kraken and other staking-as-a-service providers and take on risks with minimal protection, it added. “Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection,” said SEC Chair Gary Gensler. Like many crypto-focused firms, Kraken has been stung by the lingering market downturn. The company said in December 2022 that it will end its Japan-based operations, citing the global crypto market slump .

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