Tag: sec

Kraken Challenges SEC Lawsuit as Regulatory Overstep

Post By Cryptocurrency , ,

Cryptocurrency exchange Kraken has filed a motion to dismiss
the lawsuit brought forth by the US Securities and Exchange Commission (SEC).
The lawsuit, initiated following Kraken’s vocal testimony before Congressional
committees, has ignited a debate about the boundaries of regulatory authority.

Kraken’s testimony, delivered on May 10, 2023, underscored
its concerns regarding the lack of comprehensive regulation governing the
digital asset industry. The exchange emphasized the necessity for tailored
rules to safeguard consumers and investors while also advocating for
limitations on the SEC’s jurisdiction in crafting crypto exchange regulations.

The SEC’s subsequent decision to sue Kraken, which the
exchange views as retaliation for its outspoken advocacy, has sparked a legal
battle centering on fundamental questions of regulatory authority and investor
protection.

At the heart of Kraken’s defense is the assertion that the SEC‘s allegations lack
substance, focusing solely on registration-based arguments rather than claims
of fraud or consumer harm. Kraken
challenges the SEC’s interpretation of crypto tokens as “investment
contracts,” arguing that the SEC fails to establish the presence of a
contractual agreement between buyers and token issuers, a cornerstone
requirement under existing legal precedent.

Legal Debate: Interpreting Howey Test in Cryptocurrency
Sphere

Moreover, Kraken contests the SEC’s
application of the Howey test, a pivotal legal standard for determining
whether a transaction constitutes an investment contract. The exchange argues
that the SEC’s expansive interpretation of the Howey test, without requisite
elements such as pooled investments or expectations of profits from a common
enterprise, sets a dangerous precedent for regulatory overreach.

Kraken’s motion to dismiss also invokes the Major Questions
Doctrine, a legal principle aimed at curbing arbitrary agency expansion without
clear congressional authorization. The exchange contends that the SEC’s
attempts to extend its jurisdiction into the burgeoning digital asset industry
lack a mandate from Congress, raising concerns about the abuse of regulatory
power.

In its defense, Kraken underscores its commitment to
advocating for clear and coherent regulatory frameworks that promote innovation
while safeguarding market participants. The exchange maintains that while
regulatory clarity is essential, the SEC’s approach to litigation reflects an
alarming departure from established legal norms, potentially stifling
innovation and impeding the growth of the crypto industry.

Cryptocurrency exchange Kraken has filed a motion to dismiss
the lawsuit brought forth by the US Securities and Exchange Commission (SEC).
The lawsuit, initiated following Kraken’s vocal testimony before Congressional
committees, has ignited a debate about the boundaries of regulatory authority.

Kraken’s testimony, delivered on May 10, 2023, underscored
its concerns regarding the lack of comprehensive regulation governing the
digital asset industry. The exchange emphasized the necessity for tailored
rules to safeguard consumers and investors while also advocating for
limitations on the SEC’s jurisdiction in crafting crypto exchange regulations.

The SEC’s subsequent decision to sue Kraken, which the
exchange views as retaliation for its outspoken advocacy, has sparked a legal
battle centering on fundamental questions of regulatory authority and investor
protection.

At the heart of Kraken’s defense is the assertion that the SEC‘s allegations lack
substance, focusing solely on registration-based arguments rather than claims
of fraud or consumer harm. Kraken
challenges the SEC’s interpretation of crypto tokens as “investment
contracts,” arguing that the SEC fails to establish the presence of a
contractual agreement between buyers and token issuers, a cornerstone
requirement under existing legal precedent.

Legal Debate: Interpreting Howey Test in Cryptocurrency
Sphere

Moreover, Kraken contests the SEC’s
application of the Howey test, a pivotal legal standard for determining
whether a transaction constitutes an investment contract. The exchange argues
that the SEC’s expansive interpretation of the Howey test, without requisite
elements such as pooled investments or expectations of profits from a common
enterprise, sets a dangerous precedent for regulatory overreach.

Kraken’s motion to dismiss also invokes the Major Questions
Doctrine, a legal principle aimed at curbing arbitrary agency expansion without
clear congressional authorization. The exchange contends that the SEC’s
attempts to extend its jurisdiction into the burgeoning digital asset industry
lack a mandate from Congress, raising concerns about the abuse of regulatory
power.

In its defense, Kraken underscores its commitment to
advocating for clear and coherent regulatory frameworks that promote innovation
while safeguarding market participants. The exchange maintains that while
regulatory clarity is essential, the SEC’s approach to litigation reflects an
alarming departure from established legal norms, potentially stifling
innovation and impeding the growth of the crypto industry.



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#Kraken #Challenges #SEC #Lawsuit #Regulatory #Overstep

SEC Chief Warns on Crypto Investments

Post By Cryptocurrency

Amid anticipations surrounding the potential
approval of a spot Bitcoin exchange-traded product by the Securities and
Exchange Commission (SEC), Chair Gary Gensler’s recent cautionary statements
have cast a spotlight on the inherent risks within the crypto landscape.

Gensler’s thread on social media underscored the
significant concerns around crypto investments. He emphasized the volatility of digital assets and their susceptibility to fraudulent schemes.

Gensler warned against the risks inherent in
cryptocurrency investments. His social media thread, albeit not explicitly tied
to the awaited spot Bitcoin ETF approval, sheds light on the broader concerns surrounding
crypto investments.

Gensler’s cautionary statement concerns asset managers
potentially bypassing federal securities laws with their crypto investment
offerings. The SEC’s Chairman commented on the possibility that certain
investment assets may not align with established regulatory frameworks,
prompting a call for investors to be vigilant and to conduct due diligence.

Gensler’s remarks revolved around
inherent volatility and vulnerability in crypto investments. His comments highlighted the sector’s
susceptibility to market fluctuations. Besides that, he emphasized the need for investors to
exercise caution, particularly given the prevalence of fraudulent activities in
the crypto space.

Spot Bitcoin ETF Speculations

Recently, the price of Bitcoin soared past $45,000
amid immense anticipation for the approval of the first spot Bitcoin ETF.
According to a report by Finance Magnates, analysts are anticipating the SEC to
potentially approve the spot Bitcoin ETF between January 8 and 10, with the
entire crypto community eagerly awaiting this decision.

This event has led to a strategic shift in
the market, with investors withdrawing their digital assets from exchanges. This trend signals a
long-term commitment as companies prepare for the
impending news.

Contrary to expectations, analysts predict limited
downside after the ETF’s approval due to the decreasing supply of BTC on
exchanges. On the contrary, a rejection of the spot Bitcoin ETF by the SEC could cause a shift in the market, potentially turning bullish sentiments
bearish and forcing traders to readjust their strategies.

Amid anticipations surrounding the potential
approval of a spot Bitcoin exchange-traded product by the Securities and
Exchange Commission (SEC), Chair Gary Gensler’s recent cautionary statements
have cast a spotlight on the inherent risks within the crypto landscape.

Gensler’s thread on social media underscored the
significant concerns around crypto investments. He emphasized the volatility of digital assets and their susceptibility to fraudulent schemes.

Gensler warned against the risks inherent in
cryptocurrency investments. His social media thread, albeit not explicitly tied
to the awaited spot Bitcoin ETF approval, sheds light on the broader concerns surrounding
crypto investments.

Gensler’s cautionary statement concerns asset managers
potentially bypassing federal securities laws with their crypto investment
offerings. The SEC’s Chairman commented on the possibility that certain
investment assets may not align with established regulatory frameworks,
prompting a call for investors to be vigilant and to conduct due diligence.

Gensler’s remarks revolved around
inherent volatility and vulnerability in crypto investments. His comments highlighted the sector’s
susceptibility to market fluctuations. Besides that, he emphasized the need for investors to
exercise caution, particularly given the prevalence of fraudulent activities in
the crypto space.

Spot Bitcoin ETF Speculations

Recently, the price of Bitcoin soared past $45,000
amid immense anticipation for the approval of the first spot Bitcoin ETF.
According to a report by Finance Magnates, analysts are anticipating the SEC to
potentially approve the spot Bitcoin ETF between January 8 and 10, with the
entire crypto community eagerly awaiting this decision.

This event has led to a strategic shift in
the market, with investors withdrawing their digital assets from exchanges. This trend signals a
long-term commitment as companies prepare for the
impending news.

Contrary to expectations, analysts predict limited
downside after the ETF’s approval due to the decreasing supply of BTC on
exchanges. On the contrary, a rejection of the spot Bitcoin ETF by the SEC could cause a shift in the market, potentially turning bullish sentiments
bearish and forcing traders to readjust their strategies.



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#SEC #Chief #Warns #Crypto #Investments

Jim Geraghty explores why Barney Frank (R) would ‘be the media’s banking-crisis villain’ right now

Post By Politics , , , , , , , , , ,

Man. That venture capital bank bailout mess is really something, isn’t it? To quote the great George Costanza, “This thing is like an onion. The more layers you peel, the more it stinks.”

And in case you missed it, there’s quite an interesting and stinky layer to the bailouts, and its name is Barney Frank. As in Barney Frank, the former Democratic congressman whose name is on a major piece of Wall Street reform legislation and who just so happened to be a member of the board of New-York-based Signature Bank, which went down in the same batch as Silicon Valley Bank.

National Review senior political correspondent Jim Geraghty has got a fascinating new thread today to accompany a fascinating new Morning Jolt all about how Barney Frank fits into the bank bailout puzzle — and about how, if Frank had an (R) after his name, he’d be the subject of an endless media outrage cycle:

It’s time to go on a journey.

Dun-dun-duuuunnnnnn:

Without any doubt whatsoever.

We’ll bet he doesn’t. And, infuriatingly, our incurious Guardians of Truth are just fine with that.

And it’s extremely tough to believe anything that comes out of Barney Frank’s mouth. The media know it, too. They just don’t care.

If only.

***

Related:

Jim Geraghty’s new must-read thread takes an insightful look at what the attacks on Kyrsten Sinema say about the progressive Left’s true intentions

Jim Geraghty’s latest thread takes a disturbing but valuable look at the implications of MSM’s sharp shift in coverage of Joe Biden

Jim Geraghty marks Anthony Fauci’s impending retirement with a look back at some of the biggest things the MSM let him get away with

***

Do you enjoy Twitchy’s conservative reporting taking on the radical left and woke media? Support our work so that we can continue to bring you the truth.  Join Twitchy VIP and use the promo code SAVEAMERICA to get 40% off your VIP membership!



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#Jim #Geraghty #explores #Barney #Frank #medias #bankingcrisis #villain

What investors need to know about ‘staking,’ the passive income opportunity at the center of crypto’s latest regulation scare

Post By Business , , , , , ,

Not six months ago, ether led a recovery in cryptocurrency prices ahead of a big tech upgrade that would make something called “staking” available to crypto investors.

Most people have hardly wrapped their heads around the concept, but now, the price of ether is falling amid mounting fears that the Securities and Exchange Commission could crack down on it.

On Thursday, Kraken, one of the largest crypto exchanges in the world, closed its staking program in a $30 million settlement with the SEC, which said the company failed to register the offer and sale of its crypto staking-as-a-service program.

The night before, Coinbase CEO Brian Armstrong warned his Twitter followers that the securities regulator may want more broadly to end staking for U.S. retail customers.

“This should put everyone on notice in this marketplace,” SEC Chair Gary Gensler told CNBC’s “Squawk Box” Friday morning. “Whether you call it lend, earn, yield, whether you offer an annual percentage yield – that doesn’t matter. If someone is taking [customer] tokens and transferring to their platform, the platform controls it.”

Staking has widely been seen as a catalyst for mainstream adoption of crypto and a big revenue opportunity for exchanges like Coinbase. A clampdown on staking, and staking services, could have damaging consequences not just for those exchanges, but also Ethereum and other proof-of-stake blockchain networks. To understand why, it helps to have a basic understanding of the activity in question.

Here’s what you need to know:

What is staking?

Staking is a way for investors to earn passive yield on their cryptocurrency holdings by locking tokens up on the network for a period of time. For example, if you decide you want to stake your ether holdings, you would do so on the Ethereum network. The bottom line is it allows investors to put their crypto to work if they’re not planning to sell it anytime soon.

How does staking work?

Staking is sometimes referred to as the crypto version of a high-interest savings account, but there’s a major flaw in that comparison: crypto networks are decentralized, and banking institutions are not.

Earning interest through staking is not the same thing as earning interest from a high annual percentage yield offered by a centralized platform like those that ran into trouble last year, like BlockFi and Celsius, or Gemini just last month. Those offerings really were more akin to a savings account: people would deposit their crypto with centralized entities that lent those funds out and promised rewards to the depositors in interest (of up to 20% in some cases). Rewards vary by network but generally, the more you stake, the more you earn.

By contrast, when you stake your crypto, you are contributing to the proof-of-stake system that keeps decentralized networks like Ethereum running and secure; you become a “validator” on the blockchain, meaning you verify and process the transactions as they come through, if chosen by the algorithm. The selection is semi-random – the more crypto you stake, the more likely you’ll be chosen as a validator.

The lock-up of your funds serves as a sort of collateral that can be destroyed if you as a validator act dishonestly or insincerely.

This is true only for proof-of-stake networks like Ethereum, Solana, Polkadot and Cardano. A proof-of-work network like Bitcoin uses a different process to confirm transactions.

Staking as a service

In most cases, investors won’t be staking themselves – the process of validating network transactions is just impractical on both the retail and institutional levels.

That’s where crypto service providers like Coinbase, and formerly Kraken, come in. Investors can give their crypto to the staking service and the service does the staking on the investors’ behalf. When using a staking service, the lock-up period is determined by the networks (like Ethereum or Solana), and not the third party (like Coinbase or Kraken).

It’s also where it gets a little murky with the SEC, which said Thursday that Kraken should have registered the offer and sale of the crypto asset staking-as-a-service program with the securities regulator.

While the SEC hasn’t given formal guidance on what crypto assets it deems securities, it generally sees a red flag if someone makes an investment with a reasonable expectation of profits that would be derived from the work or effort of others.

Coinbase has about 15% of the market share of Ethereum assets, according to Oppenheimer. The industry’s current retail staking participation rate is 13.7% and growing.

Proof-of-stake vs. proof-of-work

Staking works only for proof-of-stake networks like Ethereum, Solana, Polkadot and Cardano. A proof-of-work network, like Bitcoin, uses a different process to confirm transactions.

The two are simply the protocols used to secure cryptocurrency networks.

Proof-of-work requires specialized computing equipment, like high-end graphics cards to validate transactions by solving highly complex math problems. Validators gets rewards for each transaction they confirm. This process requires a ton of energy to complete.

Ethereum’s big migration to proof-of-stake from proof-of-work improved its energy efficiency almost 100%.

Risks involved

The source of return in staking is different from traditional markets. There aren’t humans on the other side promising returns, but rather the protocol itself paying investors to run the computational network.

Despite how far crypto has come, it’s still a young industry filled with technological risks, and potential bugs in the code is a big one. If the system doesn’t work as expected, it’s possible investors could lose some of their staked coins.

Volatility is and has always been a somewhat attractive feature in crypto but it comes with risks, too. One of the biggest risks investors face in staking is simply a drop in the price. Sometimes a big decline can lead smaller projects to hike their rates to make a potential opportunity more attractive.

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#investors #staking #passive #income #opportunity #center #cryptos #latest #regulation #scare