Hester Peirce, a commissioner of the United States Securities and Exchange Commission (SEC), has publicly criticized her own agency for terminating Kraken’s cryptocurrency staking program in the United States.
In a statement titled “Kraken Down” released on February 9th, the commissioner harshly criticised her organization, claiming that enforcing regulations “is not an effective or fair manner of governing” a new sector of the economy. To repeat what she put in her writing:
“The SEC’s decision to end Kraken’s staking program today is good news for investors, the agency said. I must strongly disagreed.”
In addition to criticizing the regulator, Peirce’s statement also criticized them for ending a “program that has benefited people well.”
It is neither efficient nor fair to use enforcement actions to communicate the law to participants in a new industry. Further, she argued that since staking services vary, “cookie-cutter” approaches to compliance are ineffective.
Peirce said the SEC was “lazy and paternalistic,” and that instead, it should have begun a “public process to design a practical registration procedure that gives vital information to investors.”
The CEO and co-founder of Coinbase, Brian Armstrong, tweeted on February 9 that he agreed with Peirce’s views and called it a “disingenuous offer” since there is no clear road to registration for firms that use Coinbase’s staking services.
This week, Armstrong said that he had heard “rumors that the SEC would want to do away of crypto staking in the U.S. for retail consumers,” calling this a “bad road for the U.S.” since it would force even more crypto firms to go overseas.
For token initiatives with the goal of creating decentralized networks, Peirce has suggested a “safe harbor” in which network creators would be granted immunity from SEC regulations for the first three years after the project’s launch.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.