“Paternalistic and lazy”: SEC Commissioner Hester Peirce denounces the agency’s actions against Kraken

SEC Chairman Gary Gensler’s latest decision to force Kraken to shut down its staking services is drawing criticism from within the agency.

The SEC is to blame

Not everyone at the SEC is happy with the agency’s recent action against Kraken. Commissioner Hester Peirce published a letter yesterday in which she criticized the Securities and Exchange Commission’s decision to close the crypto-currency exchange’s staking products. The U.S. regulator had announced earlier in the day that it had reached an agreement with Kraken in which the company agreed to cease its staking services in the U.S. (and pay a $30 million fine) for failing to properly register the program.

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Hester Peirce argued that Kraken would not have been able to register its staking products even if it had wanted to. “In the current climate, crypto-currency-related offerings are not going through the SEC’registration pipeline” she said, referring to the difficulties crypto-currency companies face in getting clear regulatory frameworks from the SEC.

We’ve known about crypto staking programs for a long time“, she wrote. “Instead of going the route of thinking about staking programs and issuing guidance, we have again chosen to speak through an enforcement action.“SEC Chairman Gary Gensler has been repeatedly criticized by industry leaders and legislators for his approach to “regulation by enforcement“.

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Hester Peirce also asserted that the settlement did little to clarify the situation for other staking service providers, as the product itself raised a “a host of complex issues“. She added that many companies have adopted different business models. “Staking services are not uniform, so ad hoc enforcement actions and cookie-cutter analyses do not…” [sic] are not sufficient“, she wrote, before calling the SEC’s approach “paternalistic and lazy“.

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