Kraken to pay SEC $30 million to settle case

Cryptocurrency exchange Kraken will pay $30 million to settle allegations by the Securities and Exchange Commission (SEC) of violating the agency’s digital asset rule and will stop staking in the US as part of an agreement with the regulator.

The SEC on Thursday said the company’s staking services were an illegal sale of securities, according to Bloomberg. The agreement with Kraken could have a strong impact on the industry as major crypto exchanges, including those operated by Coinbase Global Inc. and Binance Holdings Ltd. have started using staking products to diversify their income.

Staking allows users to earn income in exchange for being allowed to use their tokens to facilitate transactions on the blockchain. According to the SEC, in the case of the yield offered by Kraken, it could be as high as 21%.

A spokesperson for Kraken said in a statement that the company will end its staking services for U.S. customers only.