The Securities and Exchange Commission escalated its enforcement campaign against the cryptocurrency industry Thursday with a settlement that could imperil a lucrative activity for other major crypto firms, the Wall Street Journal reported. On Thursday, Payward Inc.’s Kraken platform agreed to stop offering so-called crypto staking services in the U.S. and pay $30 million in penalties to the SEC. Staking allows investors to earn a yield by temporarily handing their crypto tokens over to either an intermediary or a cryptocurrency network. The first case of its type, the settlement advances SEC Chair Gary Gensler’s effort to rein in what he characterizes as widespread noncompliance with U.S. securities laws by crypto platforms. Since taking office in 2021, Mr. Gensler has argued that crypto exchanges have broken the law by allowing investors to buy and sell assets that should have been registered with the SEC before they were offered. The SEC has yet to fully test Mr. Gensler’s theory in court, drawing criticism from some investor-protection advocates that the agency moved too slowly to stop the wave of bankruptcies that have plagued crypto in recent months. It only sued Sam Bankman-Fried after his crypto exchange, FTX, mishandled billions of dollars of investor funds and collapsed.
