Kraken has settled charges with the U.S. Securities and Exchange Commission (SEC) and is shutting down its on-chain staking program, the government agency shared on Thursday.
The exchange, which was charged under its subsidiaries of Payward Ventures and Payward Trading, will pay $30 million in charges for “disgorgement, prejudgment interest and civil penalties.” In response to the settlement, Kraken has agreed to end its on-chain staking services for U.S. clients, a spokesperson for the exchange told TechCrunch.
As part of the settlement, Kraken has neither admitted nor denied the SEC’s allegations, the spokesperson added.
“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,” SEC Chair Gary Gensler said in the release. “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.”
“Starting today, with the exception of staked ether (ETH), assets enrolled in the on-chain staking program by U.S. clients will automatically be unstaked and will no longer earn staking rewards,” a Kraken spokesperson said. “Further, U.S. clients will not be able to stake additional assets, including ETH.”