• The SEC has charged Payward Ventures and Payward Trading, commonly known as Kraken, for failing to register the offer and sale of their crypto asset staking-as-a-service program.
• Kraken has agreed to pay $30 million in disgorgement, prejudgment interest and civil penalties.
• The SEC’s complaint also alleges that Kraken provided investors with zero insight into its financial condition.
SEC Charges Kraken for Unregistered Crypto Staking Program
The Securities and Exchange Commission (SEC) has charged Payward Ventures, Inc. and Payward Trading Ltd., commonly known as Kraken, for failing to register the offer and sale of their crypto asset staking-as-a-service program.
Kraken Agrees To Cease Offerings And Pay Disgorgement
Kraken has agreed to immediately cease offering or selling securities through the staking services and pay $30 million in disgorgement, prejudgment interest and civil penalties. In addition, Payward Ventures and Payward Trading have consented to the entry of a final judgment that would permanently enjoin them from violating the Securities Act of 1933.
Securities Act Violations Alleged
The SEC’s complaint alleges that Kraken claimed its staking investment program offered easy-to-use benefits and strategies to obtain regular investment returns without providing investors with any insight into its financial condition or other necessary disclosures.
SEC Chair Comments On Action
SEC Chair Gary Gensler commented, „Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.“ SEC Director of the Division of Enforcement Gurbir S. Grewal added,“Today we take another step in protecting retail investors by shutting down this unregistered crypto staking program.“
The investigation was conducted by Laura D’Allaird and Elizabeth Goody under the supervision of Paul Kim, Jorge G. Tenreiro, David Hirsch with assistance from Sachin Verma Eugene Hansen James Connor.