The U.S. Securities and Exchange Commission (SEC) has sparked widespread panic over the past 24 hours to shut down the cryptocurrency market through Kraken’s staking program. According to the SEC, Kraken’s gambling program does not comply with US securities laws and this could affect other exchange platforms as well. After this difficult decision, the great Coinbase also panicked.
Panic on Coinbase
In the 24 hours following the SEC’s decision to shut down the Kraken gambling program, Coinbase users also began to worry. Coinbase offers similar betting programs, which may also have to be discontinued at short notice. As a result, Coinbase users have converted approximately $5 billion worth of United States Dollar (USDC) coins into fiat currency in the past few hours.
If Kraken’s staking program qualifies as an unregulated security under US securities laws, Coinbase will likely suffer the same fate. Besides, Coinbase felt the effects of the decision not only in the massive amounts of USDC that customers are currently converting to fiat currency.
Shortly after the SEC ruling, the entire cryptocurrency market also collapsed. Bitcoin lost 3.85% in the past 24 hours, while Ethereum lost 5.25%. The market now seems to be taking a deep breath, but the last word on this is far from over. The SEC’s decision surprised the entire industry.
stocks down
Currently, not only cryptocurrencies are feeling the pain of the SEC decision. The listed Coinbase was also hit. In the closing hours of the US trading session on Thursday, the share price fell 14 percent. The front market is now open and another 1% drop is predicted for Coinbase.
Coinbase CEO Brian Armstrong spoke immediately after the SEC’s decision. He apparently disagrees with the financial regulator’s arbitrary decision to classify the Kraken gambling program as an unregulated security.
“We continue to fight for economic freedom (our mission at Coinbase). Some days, being the most trusted brand in the crypto industry means protecting our customers from government abuses of power,” said Coinbase CEO Brian Armstrong.
Incidentally, not everyone agrees with Armstrong’s words. Stephan Livera, a well-known Bitcoin podcaster, wrote in response to Armstrong that Coinbase regularly listed “scamcoins” on the exchange platform. “I don’t understand how you can claim that Coinbase is the most trusted brand in the industry.” therefore a hard liver.
Kraken’s answer
The SEC’s decision doesn’t mean Kraken has to completely shut down its gambling program. In principle, the ban only applies to US customers of the trading platform. Kraken will continue to offer the restocking program to non-US customers through a separate Kraken entity.
The assets of US customers were immediately segregated and repatriated to those users’ accounts. Only ethers currently linked to Ethereum’s new proof-of-stake blockchain cannot be unlinked until the next update. It is currently not possible to withdraw Ether.
US users with an Ethereum stake in the Kraken platform can therefore wait for the additional revenue until the Shanghai Ethereum upgrade. After that, that part of the Kraken’s attack program will also be terminated and they will have to look for other solutions.
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Source: Btc Direct
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
