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There is a tug-of-war going on between the SEC and CFTC to take hold of the cryptocurrency markets as the appointed regulator. There have been attempts to qualify cryptocurrencies as either securities or commodities from both sides.
Recently, SEC has increased the pressure on the cryptocurrency market by cracking down on staking services provided by cryptocurrency exchanges and other DeFi tokens.
To this end, former chief of CFTC, Timothy Massad, recently told the media that SEC should come forward to define set parameters for legally permissible staking services. He was attending the Taiwan Fintech Association Conference in Taipei recently.
SEC’s Crackdown on Staking Programs
He issued these comments under the pretext of the SEC’s conviction of Kraken exchange to halt some of its staking options.
The former chairperson of CFTC also said in his address that Kraken provided its staking services as investment contracts; therefore, the action taken by SEC seems legible. However, he maintained that the staking services that are offered by Kraken exchange are very different from other cryptocurrency exchanges.
He exclaimed that at this point, it is difficult to decipher if SEC’s pushback is going to be limited to Kraken only or affect the staking models in the greater DeFi.
Concerns in the DeFi markets have increased since the action against the Kraken exchange, and Coinbase CEO has also come forward to ensure his users that the company does not have any staking services that can be qualified as unregistered securities.
CFTC highlighted that SEC should provide a clear definition of what staking is allowed and acceptable under regulatory supervision. He claimed that investors could hope that SEC officials are working on issuing a guide on the matter that can serve as a solid legal basis for their legal actions.
Kraken exchange has been ordered by the court to shut down its staking services on account of the lawsuit brought against the firm.
SEC was successful in proving the staking services offered by Kraken as unregistered securities and has dubbed this victory a win for the investors. Meanwhile, SEC commissioner Hester Peirce has rebuked this action and called it lethargic and a dictatorship.
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