U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler is warning crypto firms to follow the lead of digital exchange Kraken, which has agreed to halt its staking service and pay a $30 million U.S. fine.
"Companies like Kraken can offer investment contracts and investment schemes, but they have to have full, fair and truthful disclosure," Gensler said during a media interview.
Gensler added that “Other platforms should take note of this and seek to come into compliance, do the proper disclosures and registration and the like.”
The SEC has said that a cryptocurrency company hoping to offer staking-as-a-service, which is a registered securities offering under the regulator's purview, would have to first register as a securities platform before getting the agency's approval on the product.
Gensler said that the regulator is using all available tools and is talking directly to market participants about compliance, and insisted that the regulator is “technology neutral” when asked if the SEC's goal is to try and keep cryptocurrencies out of the mainstream financial system.
Gensler’s comments come months after the bankruptcy of crypto exchange FTX and fraud charges against its founder Sam Bankman-Fried allege the company stole customer funds.
When asked if the SEC planned to impose additional regulations on the cryptocurrency sector,
Gensler said “…The runway is getting awfully short. And we're here to try to protect the investing public.”
Cryptocurrencies fell sharply on news of the SEC's settlement with Kraken last week. The price of Bitcoin (BTC) is now trading at $21,500 U.S., down from more than $23,000 U.S. in recent weeks.
