Key Takeaways
- Kraken relaunches its on-chain staking services nearly two years after settling with the SEC.
- In February 2023, Kraken settled with the SEC, paying a $30 million fine and halting its staking services for U.S. customers.
- The return of staking services signals a potential easing of crypto regulations.
Crypto exchange Kraken has officially relaunched its on-chain staking services, nearly two years after it was forced to shut down following a settlement with the U.S. Securities and Exchange Commission (SEC).
The exchange’s new staking program, available in 37 U.S. states and two territories, allows customers to once again participate in bonded staking.
Kraken’s Rocky Road to Relaunch
Kraken first introduced staking services in 2019 but was forced to shut them down in February 2023 after the SEC accused the platform of violating securities laws.
The platform settled with the SEC, paying a $30 million fine, but it did not admit to wrongdoing. Instead, Kraken has continued to challenge the SEC in court, still fighting over the legal classification of staking services.
In the meantime, Kraken’s relaunch signals a possible turning point for crypto regulations in the U.S., as the company resumes offering the very services that were previously deemed unlawful.
“We are excited to bring back a brand new product enabling U.S. clients to resume staking with Kraken and play a significant role in bolstering the underlying security of blockchain networks,” said Mark Greenberg, Kraken’s Global Head of Consumer.
The $30 Million Question
Many in the crypto community have been closely watching Kraken’s $30 million settlement with the SEC.
Given the relaunch of the same staking program, questions remain about the fate of that fine. Kraken agreed to the settlement without admitting or denying the SEC’s allegations, making it a mutual agreement between the platform and the agency.
The settlement pertains to Kraken’s four-year run offering staking services under the leadership of SEC Chair Gary Gensler. However, the legal battle is far from over, as Kraken continues challenging the agency’s interpretation of securities laws.
Thomas Slattery, a California-based Attorney at West View Legal, told CCN that the $30 million fine was part of the settlement agreement with the SEC, which implied Kraken had to stop its staking-as-a-service offering.
“Accordingly, the settlement agreement with the SEC and the $30 million fine were therefore in relation to the “prior” or “previously” existing staking service being provided by Kraken. Therefore, the newly relaunched service will not come under purview of the $30 million fine and the said fine will remain intact.”
Additionally, a Kraken spokesperson told CCN that the new product was different:
“The staking product that we launched is distinct from the one we settled with the SEC in February 2023. Kraken is providing mere administrative support for staking on the blockchain by connecting client tokens to the network.”
A Changing Regulatory Landscape?
Kraken’s relaunch comes amid shifting dynamics in Washington, particularly after the change in administration.
Under President Donald Trump, who has voiced strong support for the crypto industry, there is growing optimism that the regulatory environment for cryptocurrencies may become more favorable.
The Trump administration has already made strides to support crypto, including the appointment of pro-crypto regulators to key positions.
With this shift in leadership, Kraken and other crypto firms have reason to believe that either the SEC’s lawsuits may be dismissed or that new regulations will emerge to govern services like crypto staking more clearly.
While cautious, the Biden administration’s stance on crypto has opened the door for more clarity under the Trump-led government.
As part of this shift, major political figures affiliated with Trump have been investing heavily in Ethereum, further boosting optimism within the crypto industry.
With Kraken’s staking services now live again, the company and the broader crypto sector are hopeful that the new administration’s regulatory approach will facilitate clearer communication and cooperation with the SEC, allowing for a more sustainable and growth-friendly environment for crypto services.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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