Armstrong Responds to Grewal’s Comment: SEC Settles Kraken Case
- Armstrong previously posted about the rumors on SEC’s settlement with Kraken.
- Following the tweet, SEC settled the case and Grewal responded that Armstrong’s concerns were right.
Brian Armstrong, the co-founder, and CEO of Coinbase Global Inc, the American-based publicly traded cryptocurrency exchange tweeted in response to the comment of the company’s Chief Legal Officer, Paul Grewal, on the former’s post on SEC’s settlement with Kraken.
Armstrong tweeted “well said”, referring to Grewal’s comment, claiming that “true on-chain staking services like ours are fundamentally different”:
Notably, the US Securities and Exchange Commission’s (SEC) alleged Kraken, the US-based crypto exchange for not registering “the offer and sale of their crypto-asset staking-as-a-service program”.
However, on February 10, the SEC declared that it has settled the case by Kraken ceasing the sale of “securities through crypto asset staking services or staking programs and pay $30 million in disgorgement, prejudgment interest, and civil penalties”.
On February 9, prior to the SEC’s declaration about its settlement with Kraken, Coinbase’s rival company, Armstrong tweeted sharing his concerns with the “terrible path” that the SEC would adopt if it classifies crypto staking as security.
In the subsequent tweets, he explained the futility of considering crypto staking as security, illustrating with an article published by the crypto investment platform, Paradigm.
Following Armstrong’s tweets, SEC announced its settlement of the case, proving Armstrong’s words to be true. As per the words of Grewal, “the rumors Brian Armstrong referenced yesterday were true”:
Well, now we know the rumors Brian Armstrong referenced yesterday were true: SECGov has settled claims against Kraken for particular “staking” products.
Significantly, the SEC Chair Gary Gensler said that crypto companies should “provide the proper disclosures and safeguards required by our securities laws” while offering investment contracts in exchange for investor’s tokens, through staking.