Chairman of the US Securities and Exchange Commission (SEC) Gary Gensler on the air of the TV channel CNBC urged crypto companies to take note of the Kraken incident and stop offering staking to US customers.
Gensler explained that crypto exchanges must register with the SEC in order to comply with the laws of the United States, while he mentioned that many in the crypto industry are unwilling to do this. The cryptocurrency industry has a chance to survive, and the key to success for it is the time-tested rules and laws to protect investors.
Don’t keep your hand in the client’s pocket by using their funds for your own platform.
Gensler mentioned the phrase “not your keys, not your crypto” that is popular with cryptos and advised investors to always maintain control over their assets. “If someone takes their tokens and transfers them to the platform, the platform controls them. Guess what happens if they go bankrupt? You will stand in line in bankruptcy court, ”the head of the SEC explained.
Cryptocurrency exchange Kraken was able to resolve its issues with the Securities and Exchange Commission yesterday. The company neither acknowledged nor denied the regulator’s accusations. But she agreed to close the staking program and pay $30 million in fines.
Staking is a way to get passive income from cryptocurrencies that work on the Proof-of-Stake (PoS) consensus algorithm. Staking consists in blocking a certain amount of cryptocurrency in the wallet in order to obtain the right to participate in the maintenance of the blockchain and receive a reward for this. Staking performs the same role on PoS blockchains as mining on the Bitcoin network.
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