The charges filed by the U.S. Securities and Exchange Commission (SEC) against the crypto exchange platform Kraken have angered a lot of personalities, including politicians, regulators and high-profile personalities in both blockchain and crypto spheres.
SEC’s crackdown on Kraken could have a sweeping impact on the industry, particularly in the centralized crypto exchange platforms like Coinbase and Binance, which, over the years, have tried offering a wide range of products and services to expand their revenue sources.
And while many crypto critics celebrated the financial regulator’s decision, several others were not pleased and even outraged.
For Blockchain Association CEO Kristin Smith, the SEC’s latest move is an “attack on U.S. crypto companies and retail investors.” She said that the watchdog is “regulating by enforcement and undercutting the potential of public blockchain networks in the United States.”
The CEO also called on Congress to create legislation for the emerging space or risk driving away innovation.
“Today’s settlement isn’t law, but it is another example of why we need Congress – not regulators – to determine appropriate legislation for this new technology. Otherwise, the U.S. risks driving innovation offshore and taking online freedoms away from individual users,” Smith said.
U.S. Congressman Tom Emmer, who is a known critic of SEC chairman Gary Gensler, in a tweet last week, underlined the importance of crypto staking and called the financial regulator’s move a “purgatory strategy.”
The lawmaker also echoed Smith’s concern about driving away innovation and investors offshore.
“To be clear, staking enables more people to participate in building the next generation of the internet.@GaryGensler’s regulatory purgatory strategy hurts everyday Americans the most – leaving them in the dust while these opportunities are accessible offshore,” Congressman Emmer’s tweet read.
To be clear, staking enables more people to participate in building the next generation of the internet.@GaryGensler’s regulatory purgatory strategy hurts everyday Americans the most – leaving them in the dust while these opportunities are accessible offshore. https://t.co/8YlSuBVj6L
— Tom Emmer (@GOPMajorityWhip) February 9, 2023
The most interesting criticism came from SEC commissioner Hester Peirce, who called SEC’s latest decision a “paternalistic and lazy solution” that does not “initiate a public process to develop a workable registration process that provides valuable information to investors.”
Coinbase CEO Brian Armstrong, who previously expressed his opposition against the ban on crypto staking, considered the decision an “overreach” and said that the publicly traded company, which operates a cryptocurrency exchange platform would continue to “keep fighting for economic freedom” and protect its “customers from government overreach.”
We will keep fighting for economic freedom (our mission at Coinbase). Some days being the most trusted brand in crypto means protecting our customers from government overreach.
— Brian Armstrong (@brian_armstrong) February 10, 2023
SkyBridge Capital founder Anthony Scaramucci called SEC’s action a “political overreach” and ” an attempt to stall innovation in financial services.”
We are witnessing political overreach and likely an attempt to stall innovation in financial services. How about just stating what the rules are?
— Anthony Scaramucci (@Scaramucci) February 9, 2023
On Thursday, the SEC alleged that Kraken’s staking service was an illegal sale of securities.
As a result, Kraken immediately ceased offering its crypto staking program to U.S customers and paid the $39 million fine in disgorgement, civil penalties and prejudgment interest.
Reuters
2023-02-16 19:00:06
Article from www.ibtimes.com
The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have come under fire from the blockchain and cryptocurrency communities following the recent crackdown on Kraken, one of the world’s largest and most popular cryptocurrency exchanges.
Kraken was recently warned by the SEC and FINRA for running an unregistered security offering and providing unapproved services. The exchange, which is based in San Francisco, has been accused of violating the federal securities laws, and the agency’s action is being viewed as a major sign of the agency’s increasing oversight of the cryptocurrency industry.
The criticism against the SEC and FINRA has been widespread in the cryptocurrency community, with many accusing them of overstepping their authority and harassing the company for minor technical violations. It has also drawn the attention of members of the U.S. Congress, who have begun to question whether the agency is acting in the best interest of the cryptocurrency industry.
Many members of the community have expressed concern that the SEC’s action could further jeopardize the industry’s credibility and create an environment of uncertainty. Furthermore, the fact that the agency took such strong action against a well-known and reputable exchange could also damage the trust that investors have in the cryptocurrency sector.
There is a growing sentiment within the blockchain and cryptocurrency community that SEC Chairman Gary Gensler and his staff should be more open to constructive criticism and dialogue with the stakeholders of the industry. A closer working relationship between the SEC and the crypto industry is necessary in order to ensure a fair and prosperous future for the industry. Furthermore, clear and transparent guidelines should be developed in order to ensure that exchanges and other crypto firms adhere to the necessary regulations.
Overall, the SEC and FINRA have been strongly criticized by the cryptocurrency community over their perceived overstepping of authority and their continued lack of clarity over the regulations governing the industry. The blockchain and crypto communities have called on the SEC and FINRA to establish a more collaborative relationship with the industry, to set forth clear and transparent guidelines, and to ensure that their enforcement is limited to instances of egregious violations.