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ARTICLE · 28 FEBRUARY 2023

Kraken Settles SEC Charge That Its SAAS Model Was An Illegal Securities Offering

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On February 9, 2023, the SEC announced that Kraken had settled charges alleging that it violated securities laws by failing to register the offer and sale of its "crypto asset...

United StatesTechnology
F. Phillip Hosp V
F. Phillip Hosp V
Patrick Daugherty
Patrick Daugherty
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On February 9, 2023, the SEC announced that Kraken had settled charges alleging that it violated securities laws by failing to register the offer and sale of its "crypto asset staking-as-a-service program." To settle the charges rather than fight, Kraken agreed to pay $30 million in fines and to discontinue offering its staking service to United States customers.

Because crypto is a global industry, the main result of this "investor protection" maneuver by the SEC is to deprive United States citizens and residents of Kraken's staking services as currently configured. Kraken is free to reconfigure its staking services to fit the SEC's conception of a "security" or to continue offering staking-as-a-service (SAAS) the very same way to its many customers outside the United States.

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