> The SEC’s characterization of Kraken’s staking setup highlighted the “risks” investors take on when staking their tokens with “staking-as-a-service” providers, which give them “very little protection,” a press release said.
Right. The SEC has apparently had it with uninsured, unregulated exchanges. After FTX, tolerance for that sort of thing is over. They want to stop this before somebody dips into customer funds, instead of after.
Kraken claims to be "regulated by FinCen."[1] This is deceptive. FinCen, the Financial Crimes Enforcement Network, is not a regulator of organizations which hold the assets of others. It's the anti-money-laundering coordination center, the "know your customer" part of enforcement. Anybody can file the form to be listed with FinCen; that just says you might need to report transactions in future and want a login. It's nothing like getting a banking or brokerage or exchange license, where auditors check up on what you're doing with the customers' money.
I don't think this is the same as FTX, the issue at hand is that staking is presented as unregulated investments. Functioning as an exchange is still allowed.
I believe Gemini is the one that was already punished for this, and of course Coinbase tried to do this but was stopped on the blocks.
Right. The SEC has apparently had it with uninsured, unregulated exchanges. After FTX, tolerance for that sort of thing is over. They want to stop this before somebody dips into customer funds, instead of after.
Kraken claims to be "regulated by FinCen."[1] This is deceptive. FinCen, the Financial Crimes Enforcement Network, is not a regulator of organizations which hold the assets of others. It's the anti-money-laundering coordination center, the "know your customer" part of enforcement. Anybody can file the form to be listed with FinCen; that just says you might need to report transactions in future and want a login. It's nothing like getting a banking or brokerage or exchange license, where auditors check up on what you're doing with the customers' money.
[1] https://support.kraken.com/hc/en-us/articles/360031282351-Is...