The Kraken settlement with the U.S Securities Exchange Commission (SEC) to end its crypto-staking activities has pushed Bitcoin below $22,000, amid high-selling pressures.
The development also caused Coinbase’s shares to drop to their lowest point in more than six months.
As part of the settlement with the regulator, Kraken will stop selling its crypto-staking products in the US and pay $30 million to resolve SEC’s claims that it violated US laws with those products. According to the SEC, Kraken’s staking service involved the unauthorized sale of stocks.
The settlement, according to SEC Chair Gary Gensler, “should make it obvious to the market that staking-as-a-service providers must register and offer full, fair, and truthful disclosure and investor protection.”
How Bitcoin was affected: Bitcoin fell by more than 5% to $22.8K, its lowest level in around two weeks, as a result of new worries about the regulation of cryptocurrencies. A significant portion of the decline occurred after the cryptocurrency exchange Bitcoin failed to surpass $23,000 and started to plummet once more. The price dropped this time to a two-week low of $22,400.
84,836 traders were liquidated during the day, totalling $220.14 million in liquidations. The largest single liquidation order, worth $4 million in BTC-USD-SWAP, was placed on OKX.
Since then, it has gained some ground, but it is still below $22K. As a result, it has a market worth of little under $440 billion and a 41.3% market share over alternative assets.
How other cryptos reacted: Ethereum, the leading altcoin, responded similarly, falling from its prior support, which was comfortably above $1,600, to roughly $1,546, a 6.6% reduction from Wednesday at the same time, which was part of a broader market downturn.
After a five-week spike, the price of cryptocurrencies started to decline after Coinbase CEO Brian Armstrong tweeted on Wednesday that his company had heard rumours the SEC wanted to forbid retail investors from participating in crypto staking, the revenue-generating strategy essential to maintaining blockchains like Ethereum.
Following the demise of the sizable digital asset exchange FTX last year, regulators have increased their pressure. According to its new CEO John J. Ray III, FTX was previously among the largest digital exchanges in the industry but went bankrupt after it was reportedly unlawfully handled by “a very small group of severely incompetent and uneducated personnel.”
Sam Bankman-Fried, its co-founder and former boss, is currently being prosecuted on eight charges. Last month, he entered a not-guilty plea and will return to court in October.
