Freeze Coming: SEC Hits Staking

The precedent has far-reaching consequences for the cryptocurrency industry. The collapse of FTX (including the Americanunits) exposed incompetenceregulator in the field of reducing financial risks. There are two ways to solve the problem: improve regulations or limit citizens' access to cryptocurrencies. The SEC chose the second path.

Just yesterday we shared our worriesCoinbase CEO Brian Armstrong related to a possible ban on access to staking, as a few hours later the Kraken crypto exchange announces the closure of the service and the payment of a fine of $ 30 million.

PoS coins provide investors with the opportunity to earn passive income from staking. This makes it possible to pass the Howey test of 1946 for determining "security":

Investment

To a common enterprise

With the expectation of profit

From the efforts of third parties

On the day of Ethereum's transition to a new protocolSEC Chairman Gary Gensler promised to give new status to all PoS coins. Since it is quite difficult to legally pull this off, the regulator took the simplest path - banning access to staking for US citizens.

Kraken was the first to receive the prescription, along witha fine of $ 30 million. The crypto exchange is accused of not registering a service for receiving passive profits by investors. The absurdity of the situation lies in the fact that the SEC has not developed or presented a mechanism for such registration. Incumbent Commissioner Esther Pierce publicly criticized the employer, calling the SEC "lazy."

Image source: twitter.com/SECGov

Coinbase is currently undergoing a similar test. With a high probability, the outcome will be the same - a fine and a ban on retail investors from participating in staking.

Ethereum will be hit first by the SEC ban.since Kraken and Coinbase share more than 20% of staking in staking. Altcoin lost 2% against Bitcoin in a day. The main pressure will come with the Shanghai hard fork (tentatively in March), when the staked ETH will be returned to US users.

Image Source: Cryptocurrency ExchangeStormGain

The tightening of the nuts takes place in parallel withcourt cases and investigations against Tether, Ripple, Paxos (responsible for the liquidity of USDP and BUSD stablecoins) and the development of a law on stable coins. According to Bloomberg analyst Mike McGlone, “the first real crypto recession” is yet to come.

 

Analytical group StormGain

(platform for trading, exchanging and storing cryptocurrency)