Kraken to shut down Bitcoin and Ethereum mining to settle with SEC

• Kraken and the U.S. SEC reach a settlement that requires the exchange to halt cryptocurrency staking in the United States. 
• Notable figures like Brain Armstrong and Charles Hoskinson give their two cents on the pros and cons of cryptocurrency staking. 

The recent development between the U.S. securities and exchange commissions and leading cryptocurrency exchange Kraken, has sparked an important conversation among members of the cryptocurrency community on the future of the staking of digital currencies.

According to recent reports, both the SEC and kraken exchange have come to a settlement, after the exchange platform agreed to shut down its staking operations in the United States.

For Kraken customers who partake in crypto staking on the exchange, the move might not serve them in the long term, as it will hinder activities for customers who prefer to access the market through staking.

Both parties reached settlement during a closed-door meeting. The SEC reportedly voted on a settlement during said meeting. While both SEC and Kraken’s spokesmen have declined to speak to media outlets, Coindesk mentions that an announcement regarding the settlement might come at a later time.

Kraken’s crypto lending product offers a 24% yield and is currently under the staking services it offers. Kraken’s staking service reward customers with 20% in APY.

What is the future of cryptocurrency staking in the United States?

At press time, not much has oven said by any official authorities about cryptocurrency staking in the U.S. However, Brain Armstrong, the CEO of Coinbase, made a series of alarming tweets concerning the topic.

Armstrong notes that there have been rumors about the SEC halting crypto staking for retail customers in the U.S. According to him, if the SEC carries through, it will be a terrible path for the country.

If the SEC also decides to take the path of regulation by enforcement, it will not yield any favorable results. It will only send cryptocurrency firms outside the country, in search of more friendly policies in other countries.

4/ We need to make sure that new technologies are encouraged to grow in the US, and not stifled by lack of clear rules. When it comes to financial services and web3, it’s a matter of national security that these capabilities be built out in the U.S.

— Brian Armstrong (@brian_armstrong) February 8, 2023

For the Coinbase CEO, staking is an essential innovation for the market. With staking, customers can directly partake on open crypto networks without third parties. Staking helps to further scalability, increase security and fuel the reduction in carbon footprints.

Meanwhile, Cardano’s Charles Hoskinson is on the opposite end of the conversation. Unlike Brain Armstrong, Hoskinson argues that crypto staking, particularly Ethereum staking is not as promising as it might seem.

Ethereum staking is problematic. Temporarily giving up your assets to someone else to have them get a return looks a lot like regulated products. Slashing and bonds not so good. Non-custodial liquid staking on the other hand is like the mining pools we’ve used for 13 years.

He wrote in a recent tweet.

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