Crypto Tanks, as SEC Cracks Down on Kraken
The crypto market tanks, as the SEC cracks down on Kraken exchange.
The year started with hopes high as crypto candlesticks' price lines went all green, signaling the wake of a bull run. But with the recent actions of the U. S. Securities and Exchange Commission (SEC), crypto's volatile nature seems ready to unveil itself again. It's a bad market for exchanges with similar programs in the US, as Kraken, one of the biggest US crypto exchanges, agrees to shut down its staking services and pay a $30 million fine for boycotting registration.
The SEC charged Kraken on February 9, 2023, for failing to register its staking-as-a-service business with the commission. Bowing to the pressure, Kraken agreed to stop its staking services and pay "$30 million in disgorgement, prejudgment interest, and civil penalties," according to SEC's press release.
The crypto market has tanked recently, and SEC's action is a major player in the event.
SEC's Action Has Affected Cryptocurrency Markets
Without ignoring other factors, the crackdown has suppressed the trendy rise of BTC and other cryptocurrencies, including Eth, ADA, Sol, and BNB, among many others in the past 24 hours. Crypto experts agree with this fact.
"Market moving upwards and down 3 to 4% in a day is not really uncommon within the industry," says Andrew Durgee, Head of Republic Crypto, in an interview on Fox Business. However, he further agreed that "this is definitely a market reaction to an SEC ruling that just took place with Kraken."
According to CoinMarketCap, as of writing, the value of BTC has dropped by approximately 4%, while Ethereum has tanked by 6% in the last 24 hours from their 7-day all-time high of $24,200 and $1,697, respectively. Similarly, in the past 24 hours, Sol, ADA, and Polygon's Matic have also dropped in value by more than 8%, 6.5%, and 3%, respectively.
SEC’s Regulations to Affect More Marketplaces
It seems this new development applies to all exchanges operating within the US. The SEC became interested in regulating the activities of exchange platforms, especially since FTX sank with proof of fund mismanagement and laundering.
As contained in the SEC press release, the SEC chair, Gary Gensler, says, "Whether it's through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors' tokens, need to provide the proper disclosures and safeguards required by our securities laws."
While affirming the commission's stance on the regulations of crypto exchange businesses within the US, Gary further says, "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."