Share this article
SEC Did Not Consult Industry Before Kraken Crypto Staking Charges: Commissioner Peirce
The SEC commissioner spoke a day after Kraken settled charges with the regulator that its U.S. staking service was an unregistered securities offering.
By Danny Nelson
Updated Feb 16, 2023, 4:24 p.m. Published Feb 10, 2023, 4:00 p.m.
Make us preferred on Google
PHILADELPHIA — The U.S. Securities and Exchange Commission did not attempt to consult with the crypto industry before launching this week’s unregistered securities crackdown on staking-as-a-service, Commissioner Hester Peirce said Friday.
Speaking at a student conference at the University of Pennsylvania, Peirce said the top U.S. investments regulator’s lawsuit against Kraken crypto exchange was the latest example of regulation-by-enforcement in the digital assets space. On Thursday, Kraken paid $30 million and shut down its U.S. staking business after the SEC alleged it was violating federal securities law.
STORY CONTINUES BELOW
“We had not tried to sit down with people in the industry” to discuss staking, the process by which crypto holders delegate their tokens to validators in order to earn crypto rewards, Peirce said. She said the SEC has known about staking for a long time, and its decision to strike now was “arbitrary,” as was its targeting of Kraken’s staking business first.
Read more: Kraken Agreed to Shutter US Crypto-Staking Operations to Settle SEC Charges: Source
"Yesterday’s decision basically said, ‘Let’s just shut it down.’ That can’t be the answer," the commissioner said.
Peirce's comments raise the prospect of SEC’s battle against Kraken’s staking turning into a wider war. Kraken is hardly the only U.S. entity that runs a staking business for U.S. customers. Publicly traded company Coinbase (COIN) also offers staking, and it has said that business remains online.
She took particular umbrage at the restrictive terms of Kraken’s settlement. It has vowed to never relaunch its staking business for U.S. customers, she said, meaning it can not even go through the motions of operating above board, in the SEC’s view, if it wanted to.
The SEC has taken an aggressive approach to oversight of the crypto industry under Chair Gary Gensler. Peirce has been a noted dissenter of the agency’s handling of the crypto space for years.
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
DeFi, ethics disputes remain in Senate crypto bill ahead of Jan. 15 vote
The Senate is approaching a potential markup that may advance crypto legislation to a vote, and industry insiders are amassing for a lobbying push this week.
What to know:
- The U.S. Senate is potentially as close as it's ever been to a crypto market structure law, as the Senate Banking Committee's chairman said the panel will be ready to mark up the latest draft next week.
- It's still unclear how much Democrats might push back against this timeline, considering most of the big-ticket disputes remain to be resolved between the parties.
- A negotiation document that emerged after a meeting among senators on Tuesday demonstrates that many of the Democrats' requests have potentially been satisfied, but key concerns over the ethics of senior government officials, the treatment of DeFi and the question of stablecoins offering yield still await answers.
- Crypto insiders will visit Senate offices this week to cheer on the negotiations.
Top Stories
