Kraken

The SEC is facing another defeat in its recycled lawsuit against Kraken

The Securities and Exchange Commission is suing Kraken for selling cryptocurrencies, but it looks like a recycled version of a losing lawsuit.

The legal duel between the United States Securities and Exchange Commission (SEC) and Kraken, a leading cryptocurrency exchange, looks like another misguided attempt by the SEC to exert control over an industry that fundamentally challenges an outdated regulatory playbook. The agency’s lawsuit, filed in November, accuses Kraken of operating as an unregistered securities exchange.

The lawsuit isn’t just a repeat of the SEC’s past failures.

The lawsuit isn’t just a repeat of the SEC’s past failures.

Related: Expect some crypto companies to fail in the wake of Bitcoin’s halving

Unlike traditional securities exchanges, platforms like Kraken offer a diverse range of digital assets that do not fit neatly into the securities framework.

The SEC lawsuit against Kraken shamed the exchange for telling users they could attempt to profit by dollar-cost averaging into Solana.

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When levees break, liquidity flows — Analyzing Ethereum Shapella and liquidity staking derivatives

Volumes from the top five Ethereum staking platforms suggest holders are hedging against the unknown until after ETH withdrawals are enabled.

The Ethereum network’s planned Shanghai hard fork is nearly here. Planned for April 12, this is the first major upgrade since the Merge in September 2022. The “Shapella” upgrade (a combination of the two major proposals, Shanghai and Capella), includes EIP-4895, which enables validators to withdraw staked ETH from the Beacon Chain (Consensus layer) to the EVM (execution layer). The execution layer is the fun and friendly Ethereum thausers have come to know and love. 

Why is this a big deal? With just over 18 million ETH currently staked (valued at just over $33 billion at the time of writing), some of which has been locked up for years, the possibility of these tokens flooding an already teetering market is enough to get some holders ready to sell the news once withdrawals are enabled.

For holders who are both long and short ETH post-withdrawals, it’s likely to be a significant event, and on-chain activity suggests many feel the same: activity around liquid staking derivatives (LSDs) can be a useful gauge for what the market might do post-unlock.

Liquid Staking Derivatives could exert influence over Beacon Chain unlocks

What are liquid staking derivatives? They are a relatively new financial instrument born of DeFi that functions like bearer instruments for staked ETH. Similar to how borrowing and lending protocols give users a share token to represent locked collateral (think Aave’s a-tokens), staking ETH generates a wrapped asset used to claim the equivalent amount of Ethereum from the staking platform. When a staker deposits ETH with major platforms like Lido, Rocket Pool, Frax, Stakewise and now Coinbase, they receive a platform-specific flavor of LSD. Because staked tokens are illiquid, these wrapped assets allow stakers to continue earning rewards while securing the network without completely giving up the opportunity to participate in other activities within DeFi.

Liquid staking derivatives aim to solve these problems by allowing staked assets to be traded on secondary markets. This means that stakers could access the value of their staked ETH before the Shanghai upgrade enables withdrawals or, in the future, while maintaining their staked position. For example, a staker could use their wrapped ETH as collateral on another platform, or cover an unexpected expense by selling their LSD on a secondary market.

Rocket Pool, Lido, Coinbase and Frax

Though the markets have seen what seems to be an increasing string of green days, with Ethereum rapidly catching up to Bitcoin’s year-to-date performance, ETH’s gains are set against a backdrop of volatility among LSDs and staking tokens.

Lido’s LDO hasn’t recaptured its high from early March and has maintained a resistance at $2.75. The largest staking protocol by nearly an order of magnitude, Lido currently offers some of the highest staking rewards among major providers, with an average APY around 10%. The high rewards are no surprise: Lido took in nearly 50 million ETH in fees and 5 million in revenue in March, with April on track to meet or exceed those numbers.

LDO versus ETH price. Source: TradingView

Rocket Pool’s RPL fared much better, with a 25% increase over the last thirty days. The wrapped asset issued by the number three staking provider by TVL, rETH, has historically traded at a premium to ETH and other LSDs, likely a result of the provider’s reputation as the most decentralized staking solution available to holders today, making rETH a desirable LSD to hold.

Over the last thirty days, Rocket Pool has seen over $46 million in inflows, with many likely hoping to cash in on rETH’s premium when withdrawals are enabled. Rocket Pool’s average APY according to DeFiLlama is around 3.65%, which isn’t as high as other providers, but with over 1,800 active Rocket Pool nodes, the decentralized nature of the protocol is attractive. Addresses holding RPL have been steadily increasing as well.

Conversely, LSDs from the two top staking providers, Lido and Coinbase, both trade at a discount to spot ETH. Together representing nearly 90% of all staked ETH, it’s unsurprising that Lido and Coinbase have both come under scrutiny as centralizing entities given their concentration of staked ETH.

Ethereum LSD providers share of staked ETH. Source: DeFiLlama

Despite RPL’s impressive performance and StakeWise’s native token SWISE’s 15% gain, Frax seems to have come out as the winner.

Frax Ether has seen the most significant jump in total value locked over the last 30 days compared to the other top 10 staking providers at 14% growth for a $244 million valuation. Despite the increase in TVL, Frax totaled only $3.1 million in inflow over thirty days, putting the protocol just above StakeWise’s $2.6 million.

Total value locked in Frax. Source: DeFiLlama

Liquid staking derivatives like the wrapped Ether offered by staking providers is an important part of the Ethereum ecosystem much like plasma is an essential part of human blood. DeFi, NFT trading and GameFi are all interlinked, sometimes more subtly than others.

LSDs perform an important function of maintaining liquidity within the Ethereum ecosystem. Currently, over 15% of all Ether that exists is staked with a Beacon Chain validator (meaning this doesn’t include any ETH being used as collateral on borrowing/lending platforms).

Considering that a non-trivial amount of that ETH has been locked for years, through one of the toughest bear markets on top of that, indefinitely freezing this much capital (worth over $33 billion at the time of writing) would have a lasting and noticeable effect on the entire ecosystem.

Over the last 30 days though, trying to hedge against the chaos post-Shapella by holding unstaked ETH didn’t perform much better than holding an LSD: ETH is up 31% compared to stETH’s 30%, rETH’s 30%, while Coinbase’s cbETH is up 32% and Frax’s LSD is up 34%.

Overall, liquid staking derivatives are an important development in the staking ecosystem, as they help to address some of the challenges associated with staking, while also expanding the pool of potential participants in the ecosystem.

Related: Ethereum traders show uncertainty ahead of April 12’s Shapella hard fork: Report

Withdrawals being enabled for staked Ethereum on the Beacon Chain means that proof-of-stake Ethereum has reached a point of sufficient stability and security, and the stakers who participated in securing the network will be able to retrieve their staked funds.

Regardless of the immediate impact of enabled withdrawals, proof-of-stake Ethereum’s continued success relies on incentivizing ETH holders to validate the network, and liquid staking derivatives have proven to be an effective mechanism to do so.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Coinbase CEO says Bitcoin Lightning is ‘something we’ll integrate’

“Lightning is great and something we’ll integrate,” Brian Armstrong said in response to an allegation that he was “ignoring” the network.

Bitcoin (BTC) layer 2 scaling solution Lightning may feature on the cryptocurrency exchange Coinbase in some capacity, according to its CEO, Brian Armstrong.

In a tweet on April 8, Armstrong said that “Lightning is great and something we’ll integrate” in response to a tweet criticizing him for “actively ignoring” the network.

Armstrong provided no further details on what a Lightning integration with Coinbase would involve or when it could be expected.

Coinbase, along with Binance and the now bankrupt FTX, has been called out in the past for not integrating the Lightning network which enables faster and cheaper BTC transactions than the Bitcoin base network.

According to a GitHub repository by Lightning enthusiast David Coen, Coinbase would join Bitfinex, Kraken and OKX as the largest trading platforms to have integrated Lightning, if Armstrong stays true to his word.

Coen had previously suggested that Lightning integration may go against the business plan for many of these trading platforms, “since the priority seems to be to integrate as many altcoins as possible and follow the trends of the market.”

Armstrong claims to have tested out a Lightning network application in recent days, and sent Cointelegraph reporter Joseph Hall $100 in BTC after Hall shared a video of himself using Bitcoin in Senegal.

The $100 was a prize by Armstrong for those who shared the “best” examples of how people are using crypto in Africa. Hall said he would give away the funds to onboard others to Bitcoin.

Hall reported, however, that he hasn’t received the payment, prompting Bitcoiner Derek Ross to suggest that Armstrong “needs a lesson on Lightning.”

Coinbase has lately been more active in the Ethereum ecosystem having launched “Base” on Feb 23 — an Ethereum layer 2 application-focused network powered by fellow layer 2 Optimism.

Related: Bitcoin Lightning Network growth is organic, coming from real-world adoption

Interestingly, Armstrong wrote a “Scaling Bitcoin” article in January 2016, where he said that he would throw support behind Bitcoin scaling solutions:

“We also did it to show our support for scaling Bitcoin, and encourage things to move forward, since we’d like to see a solution sooner rather than later.”

Lightning was launched about two years later in March 2018, with last month marking the fifth anniversary of the network.

Cointelegraph contacted Coinbase for comment but did not receive an immediate response.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

Bitcoin white paper makes its F1 racing debut on Kraken-sponsored car

The Kraken logo on the car includes the entirety of the abstract and introduction of “Bitcoin: A Peer-to-Peer Electronic Cash System,” and has its next race in Australia.

The Formula 1 car for the Williams Racing team will feature an excerpt from the Bitcoin white paper as a result of a sponsorship deal with United States-based crypto exchange Kraken.

In a March 31 tweet, Kraken showed its sea monster-shaped logo containing text from the opening of the 2008 document released by its creator Satoshi Nakamoto in 2008. The Kraken logo appeared to include the entirety of the abstract and introduction, as well as the sections on transactions and timestamp server of “Bitcoin: A Peer-to-Peer Electronic Cash System.“

The crypto exchange announced on March 28 that it would partner with the Williams Racing F1 team as part of a sponsorship and Web3 deal. The arrangement marked one of the first times a crypto company had sponsored an F1 team since many similar deals fell apart amid the 2022 market crash.

Related: Formula One files ‘F1’ trademarks covering crypto, NFTs and Metaverse

Practice for the next Formula One event is currently underway at the Australian Grand Prix in Melbourne, with the main race scheduled for April 2. In 2022, roughly 420,000 people reportedly attended the four-day event in person.

Magazine: Billions are spent marketing crypto to sports fans — Is it worth it?

Back on track: Kraken inks F1 crypto sponsorship deal with Williams Racing

Kraken has inked a partnership deal with Williams Racing marking the first major return to F1 for crypto this year.

Formula 1 teams could be warming to crypto advertising again despite a crypto sponsorship exodus in the wake of last year’s high-profile meltdowns.

On March 28, American crypto exchange Kraken announced that it was partnering with the Williams Racing F1 team in a new sponsorship and Web3 deal. The move marks the first major crypto company to ink a new deal in Formula 1 racing this year.

The deal will not only involve Kraken branding emblazoned on the Willams race cars, but branded team merchandise and nonfungible tokens (NFTs) for team fans to collect.

The rear wing of the car will also showcase KrakenNFT customer-owned digital collectibles artwork from leading third-party NFT projects at select races.

Williams Racing commercial director James Bower said, “We’re excited to get the partnership underway to offer our fans cutting-edge crypto and Web3 experiences, while also enabling Kraken to reach new institutional clients and businesses through our network and events.”

Several Formula 1 racing teams quickly dropped their crypto sponsorship deals when things started to melt in late 2022. In mid-November, the Mercedes F1 team suspended a partnership agreement worth an estimated $27 million with the embattled FTX exchange.

Furthermore, Ferrari abruptly ended a long-term arrangement with the Swiss blockchain organization Velas in January. Alfa Romeo dropped its sponsor, Vauld, following troubles at the crypto lender last year.

In September, Singapore put the brakes on crypto advertising around the track but allowed it to remain on the cars. Other countries including France also placed restrictions on trackside crypto commercials last year forcing some teams to remove them.

Related: Merch and perfume: Formula One trademark filing paves the way for F1 NFTs

However, some sponsorship deals have remained. The Aston Martin team has retained its crypto sponsors, Crypto.com and Socios. Binance remains the partner of the Alpine team and OKX and Tezos are still with McLaren Racing, according to reports earlier this month.

Meanwhile, the Red Bull racing team has retained its crypto sponsor Bybit and OpenSea is still with Haas.

Source: Bloomberg

Kraken’s deal with Williams Racing could be the beginning of a return to racing and sports for crypto companies in 2023 as markets recover.

Kraken to suspend Plaid withdrawals and deposits via ACH Silvergate

Joining the Silvergate Exchange Network in 2019, Kraken is now looking for new ACH funding options.

Major cryptocurrency exchange Kraken is experiencing difficulties with the withdrawal and deposit channel related to the automated clearing house (ACH) via Silvergate.

Kraken has reportedly notified its users that it will be unable to support ACH deposits and withdrawals starting from March 27. According to multiple online reports by alleged Kraken users, Kraken sent an email notice with the announcement on March 22.

In the statement, Kraken specified that users would no longer see a deposit option via Plaid or a withdrawal option via ACH Silvergate beginning March 27. “No other services will be affected by this change, including ACH instant purchases via Online Banking,” the firm noted.

Kraken has advised users to look at the other available funding options to ensure an uninterrupted funding experience, including MVB Bank for Fedwire deposits and withdrawals, and other instant purchase options.

“Our team is working to make ACH funding available again as soon as possible,” Kraken stated.

Silvergate is one of the crypto-friendly U.S. banks that collapsed in early March alongside other lenders like Silicon Valley Bank. The events have posed major challenges for the cryptocurrency industry because many crypto firms hold significant exposure to the banks.

Related: FDIC sells Signature Bank deposits to Flagstar, crypto not included

Kraken is one of the world’s largest cryptocurrency exchanges at the time of writing, trading more than $1 billion daily, according to data from CoinGecko. In 2019, Kraken joined the Silvergate Exchange Network, which allowed the firm to offer deposits and withdrawals in U.S. dollars from Silvergate accounts.

Kraken is not the only crypto exchange forced to halt its ACH deposits and withdrawals via Silvergate. On March 2, Winklevoss brothers-founded exchange Gemini also stopped accepting customer deposits and processing withdrawals through Silvergate ACH and wire transfers.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Coinbase reiterates that staking services will continue, despite SEC crackdown

Despite the SEC looking to crack down on supposed unregistered securities offerings via staking rewards programs, Coinbase has outlined that its services will continue.

Despite the recent crackdown by the United States Securities and Exchange Commission (SEC) on staking services offered by centralized providers, Coinbase has reiterated to customers that its staking services will continue and “may actually increase.”

In a new customer email, highlighted by a popular trader, AltcoinPsycho, via Twitter on March 10, Coinbase outlined its updated staking terms and conditions starting from March 29.

Under the fresh terms, Coinbase explicitly explains that users earn rewards from the decentralized protocols, not directly from the exchange itself.

“Coinbase acts only as a service provider connecting you, the validators and the protocol,” as opposed to offering a share of its own staking rewards,” the email reads, adding that:

“Your staked assets will continue earning rewards. If you want to continue staking, no action is required. Your staking rewards may actually increase.”

While the notion of Coinbase’s staking rewards continuing and potentially increasing may irk the SEC, the clear distinction around protocol rewards and service provision looks to avoid any gray area issues, like those recently faced by competing exchange Kraken.

As Cointelegraph reported, Kraken agreed to pay a $30 million settlement on Feb. 9 for allegedly failing to register its staking-as-a-service program with the SEC. As part of the deal, Kraken can no longer offer staking services in the United States.

Related: Coinbase CEO reiterates that ‘staking’ products aren’t securities

An important aspect of the SEC’s complaint was that users lost control of their tokens when using Kraken’s staking program. Investors were offered “outsized returns untethered to any economic realities,” with Kraken also able to pay “no returns at all.”

Coinbase has argued that its staking services are fundamentally different from Kraken’s. CEO Brian Armstrong stated on Feb. 10 that the firm would happily defend its position in court “if needed.”

Crypto Biz: Coinbase has a lot at stake

Coinbase says its staking product offerings are different than Kraken’s, which came under SEC scrutiny and resulted in a $30 million fine.

Crypto assets made their way onto the United States Securities and Exchange Commission’s list of priorities for 2023. So far, though, we haven’t tasted the “regulatory certainty” many have been calling for. Instead, the regulator threw the book at Kraken for allegedly failing to register its staking program. Coinbase appears next on the chopping block, but its lawyers are ready to fight.

This week’s Crypto Biz newsletter delves into Coinbase’s defense of its staking program and its not-too-pleasant quarterly financials. We also look at the latest company to fall victim to Sam Bankman-Fried’s FTX.

Coinbase beats Q4 earnings estimates amid falling transaction volume

Q4 was a rough quarter for the cryptocurrency market, and nowhere was this more evident than in Coinbase’s latest earnings report. On Feb. 21, the crypto exchange reported a 12% drop in transaction volumes during the quarter as revenues plummeted 57% year-on-year. Although the revenue figures were higher than expected, I wouldn’t put much stock in Wall Street’s projections. (If you set the bar low enough, anyone can “beat expectations.”) Nevertheless, there was a silver lining: Coinbase’s subscription and service revenues increased 34% during the quarter. However, investors should be aware that Coinbase is being probed by the United States Securities and Exchange Commission (SEC) for its staking products. The exchange is attempting to put out the fire before it even starts (more on that below).

Coinbase staking ‘fundamentally different’ to Kraken’s — chief lawyer

With the SEC cracking down on Kraken over its staking products, other exchanges are trying to get ahead of the curve to avoid similar repercussions. This week, Coinbase’s chief legal officer Paul Grewal told shareholders that the exchange’s staking products “are fundamentally different from the yield products described in the reinforcement action against Kraken.” According to Grewal, Coinbase users always retain ownership of their digital assets. Secondly, users have a “right to the return,” which means Coinbase can’t unilaterally decide not to pay any rewards for staking. The SEC filed a complaint against Kraken alleging that the exchange’s users lose control of their tokens when participating in the staking program. Kraken settled with the SEC for $30 million.

Hedge fund closes operations after losing funds in FTX exchange: Report

The crypto market felt FTX’s enduring legacy again this week after hedge fund Galois Capital reportedly shut its doors. Galois had sizable exposure to FTX when the exchange went bust in November 2022. According to the Financial Times, Galois’ co-founder Kevin Zhou has already penned a letter to investors apologizing for his firm’s involvement with FTX. Zhou also told investors they would receive 90% of Galois’ remaining assets, with the remaining 10% held at the firm temporarily. Like other FTX creditors, Galois is waiting for the bankruptcy process to begin — that process could take up to a decade to fully pan out.

Mastercard to allow crypto payments in Web3 via USDC settlements

Mastercard’s foray into the digital asset market continued this week after the payments giant disclosed a partnership with Web3 payment protocol Immersive. This means Mastercard users wishing to make a direct crypto payment will no longer rely on third parties — as long as they have a Web3 wallet. Real-time payments for digital and physical goods will be settled in USD Coin (USDC), a U.S. dollar-backed stablecoin issued by Circle. Will this partnership be an important milestone in advancing the mainstream adoption of Web3 wallets, or will it be lost in the noise? Only time will tell. In the meantime, much more work is needed to educate people about Web3’s actual meaning.

Before you go: Beware of Bing AI chat and ChatGPT pump-and-dump tokens

ChatGPT has taken the world by storm in recent months. Now, scammers want to capitalize on this growing trend by launching a series of fake pump-and-dump tokens. Investors, beware! In this week’s Market Report, Marcel Pechman and I dissect the recent explosion in pump-and-dump tokens and share a few words of wisdom on how to stay safe. We also give you the latest pulse of the cryptocurrency market and whether Bitcoin is bullish or bearish. You can watch the full replay below.

Crypto Biz is your weekly pulse of the business behind blockchain and crypto, delivered directly to your inbox every Thursday.

The fate of dollar-pegged stablecoins in question: Law Decoded, Feb. 13–20

The United States Securities and Exchange Commission (SEC) ordered Paxos Trust to stop issuing Binance USD. That could affect the whole stablecoins ecosystem.

New week, a new element of the crypto ecosystem is under attack. This time, the United States Securities and Exchange Commission (SEC) ordered Paxos Trust to stop issuing Binance USD (BUSD) — a dollar-pegged stablecoin. Paxos received a cease order from the New York Department of Financial Services (NYDFS).

With no other choice, Paxos announced that from Feb. 21, it would end its relationship with Binance for the branded U.S. dollar-pegged stablecoin BUSD. All existing BUSD tokens will remain fully backed and redeemable through Paxos Trust Company until “at least February 2024.” Customers can redeem their funds in U.S. dollars and convert their BUSD tokens to another Paxos-issued stablecoin, Pax Dollar (USDP). At the same time, the company “categorically disagreed” with the SEC’s opinion that BUSD is a security.

From disregarding the issue as “FUD” to calling it an attack against the Binance exchange, crypto community members laid down various theories on the allegations that BUSD is an unregistered security. Crypto analyst Miles Deutscher expressed the most obvious point of bewilderment — nobody expects profit when purchasing a stablecoin.

The situation may have far-reaching repercussions for the stablecoins in general. As Binance CEO Changpeng Zhao has already hinted, the industry may drop the American dollar as a peg currency altogether, switching to the euro, yen or Singapore dollar. However, some experts believe the scrutiny of Paxos was not a direct attack on stablecoins but preventive action against Paxos in particular.

SEC sues Do Kwon and Terraform Labs for fraud

The SEC has filed a lawsuit against Terraform Labs and its founder, Do Kwon, for allegedly “orchestrating a multi-billion-dollar crypto asset securities fraud.” According to the agency, Kwon and Terraform offered and sold an “inter-connected suite of crypto asset securities, many in unregistered transactions.” Kwon, a South-Korean national, is currently at large and believed to be in Serbia after leaving his residence in Singapore sometime in September 2022 following a Seoul court issuing an arrest warrant for him. Interpol reportedly issued a Red Notice for Kwon to law enforcement worldwide later in September.

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Russia to roll out CBDC pilot with real consumers in April

The Bank of Russia is preparing to roll out the first consumer pilot for the nation’s central bank digital currency (CBDC) on April 1, 2023. The upcoming CBDC pilot will involve real operations and real consumers in Russia but will be limited to a certain number of transactions and customers. Following the first pilot stage, the Bank of Russia plans to determine how to scale the digital ruble further. The news comes amid some Russian officials claiming that the Bank of Russia is considering a gold-backed token targeting cross-border transactions.

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Kansas state lawmakers look to cap crypto political donations at $100

The topic of campaign donations in crypto is undoubtedly something that will come up before the next electoral cycle in the United States. Still, Kansas state lawmakers are eager to address it beforehand. According to a new bill, no person would be allowed to make or accept crypto contributions of more than $100 for any political candidate in the state’s primary or general election. For donations under $100, the receiver would need to “immediately convert” the crypto to U.S. dollars, not use the crypto for expenditures and not hodl the funds.

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‘Regulators let the bad guys get big’ — former Kraken CEO speaks out after SEC settlement

According to Jesse Powell, U.S. regulators allowing bad actors in the crypto space to “suck up users, revenue and venture capital” could effectively destroy “the good guys.”

Jesse Powell, CEO of crypto exchange Kraken, has called out United States financial regulators for letting “the bad guys” win to suit their agenda.

In a Feb. 19 Twitter thread, Powell speculated that U.S. regulators — seemingly including the Securities and Exchange Commission — were allowing crypto firms to operate without enforcement actions as a red herring for companies that are their true targets. According to the Kraken CEO, allowing bad actors to “suck up users, revenue and venture capital” available to firms operating in accordance with regulations could effectively destroy the industry — letting competition run over each other and having regulators jail violators later.

“The bad guys are actually on-side,” said Powell. “Good guys are the enemy. If the bad guys can run long enough without blowing up, they might just kill the good guys for you.”

Powell’s statement followed Kraken reaching an agreement with the SEC, in which the crypto firm agreed to stop offering staking services or programs to U.S. clients and pay $30 million in disgorgement, prejudgement interest and civil penalties. Many in the crypto space have criticized the SEC’s actions as another example of “regulation by enforcement” — a criticism extended to the regulator cracking down on celebrities endorsing tokens through social media channels.

Related: SEC chair issues warning to crypto firms after action on Kraken staking

In September 2022, Powell announced he would be succeeded as CEO by Kraken’s chief operating officer, Dave Ripley, after which time he would stay with the crypto firm as the chair of the board. Paxos was also reportedly facing enforcement action from the SEC for allegedly violating investor protection laws in dealing with Binance USD (BUSD) stablecoins.