Not a great way to end the working week, this. Amid reports that US regulator the SEC has shut down the Kraken exchange’s staking program, fears of broader consequences for the crypto industry are spreading.

Crypto prices have taken a tumble overnight on the news, and we’ll get to that further below.

Yesterday, the CEO of major crypto exchange Coinbase Brian Armstrong highlighted rumours that the US Securities and Exchange Commission (SEC) has a hard-on for banning crypto staking.

Staking, if you didn’t know, refers to the process of locking up certain cryptocurrencies to earn percentage-rate rewards. Generally speaking, by staking “Proof-of-Stake” (PosS) cryptos, such as ETH or ADA, you’re also helping as a cog in the mechanism of securing a specific PoS blockchain network as well as gaining a passive income over time.

Another rumour surfaced, too – circulated by venture capitalist and non-maxi Bitcoiner Nic Carter – that the Biden administration is planning to “quietly” move against the crypto industry in the US more broadly.

Carter describes it as a “sophisticated, widespread crackdown” on the industry in the US and refers to it as “Operation Choke Point 2.0”, which is a reference to an Obama-era move to remove perceived undesirable players in the banking industry.

And now, in the most immediate revelation in this disturbing news, the prominent, US-founded Kraken crypto exchange has shut down its crypto staking service in the US after being formally investigated by the SEC for offering digital assets products that the US agency believes could be deemed as unregistered securities.

Kraken has reportedly now made a US$30 million settlement with the SEC in charges for “disgorgement, prejudgment interest and civil penalties” and has agreed to end its staking program for US clients.

 

SEC commissioner Hester Peirce dissents

One SEC commissioner who regularly takes an opposing stance to SEC chief Gary Gensler’s crypto-industry views, is Hester Peirce, aka “Crypto Mom” to some.

Peirce has been quick to release a statement condemning the agency’s latest actions.

The whole statement is worth a read, but here are the chief highlights:

“Today, the SEC shut down Kraken’s staking program and counted it as a win for investors. I disagree and therefore dissent.

“Using enforcement actions to tell people what the law is in an emerging industry is not an efficient or fair way of regulating. Moreover, staking services are not uniform, so one-off enforcement actions and cookie-cutter analysis does not cut it.

“Most concerning, though, is that our solution to a failure to register violation is to shut down entirely a program that has served people well…

“A paternalistic and lazy regulator settles on a solution like the one in this settlement: do not initiate a public process to develop a workable registration process that provides valuable information to investors, just shut it down.

“More transparency around crypto-staking programs like Kraken’s might well be a good thing. However, whether we need a uniform regulatory solution and if that regulatory solution is best provided by a regulator that is hostile to crypto, in the form of an enforcement action, is less clear.”

 

Top 10 overview

With the overall crypto market cap at US$1.06 trillion, down more than 5%  since this time yesterday, here’s the current state of play among top 10 tokens – according to CoinGecko.

Yikes. Blood in the water here, and the US regulatory sharks are circling.

Chartists’ eyes naturally turn to Bitcoin (BTC) first as the market’s health barometer, but it’s the altcoins that bleed out faster once the leading crypto takes a few heavy body blows.

Ethereum, as the industry’s major Proof-of-Stake (PoS) protocol, is not liking the SEC crackdown news at all today, which is more than understandable. The ETH token has sunk by 6.6% at the time of writing, but other top-tenners, such as Dogecoin, Ethereum L2 Polygon and fellow PoS chain Cardano are taking it harder.

Meanwhile in technical “let’s just look at the charts, shall we?” analysis land, here are a couple of different takes for the short term from two US-based line, candle and triangle watchers.

Justin Bennett notes that US$20 billion of Bitcoin long liquidations got flushed down the trading toilet and that unless we get a bounce tout suite, then BTC is heading below US$21k again soon.

Roman Trading, on the other hand, sees support at US$21.2k and a potential bounce there…

 

Uppers and downers: 11–100

Sweeping a market-cap range of about US$9.7 billion to about US$419 million in the rest of the top 100, let’s find some of the biggest 24-hour gainers and losers at press time. (Stats accurate at time of publishing, based on CoinGecko.com data.)

DAILY PUMPERS

• Rocket Pool (RPL), (market cap: US$908 million) +16%

• Lido DAO (LDO), (mc: US$2.16 billion) +4%

• Frax Share (FXS), (mc: US$898 million) +4%

 

What’s interesting here on this shorter-than-usual pumpers list today is that these three (RPL, LDO and FXS) are all top decentralised liquid staking plays.

The fact a centralised staking service has shut itself down in the face of heavy-handed regulatory actions is telling for this rogue narrative bump-up today, as these three tokens very much push the benefits of DeFi and decentralisation in crypto.

 

DAILY SLUMPERS

• SingularityNET (AGIX), (market cap: US$452 million) -21%

• The Graph (GRT), (market cap: US$1.29 billion) -17%

• Baby Doge Coin (BABYDOGE), (market cap: US$460 million) -17%

• NEAR Protocol (NEAR), (market cap: US$1.92 million) -16%

• Fantom (FTM), (market cap: US$1.24 million) -15%

 

Around the blocks

Some pertinence and randomness that stuck with us on our morning moves through the Crypto Twitterverse.

Meanwhile, Joe Biden (via an interpretation from Twitter account @VentureCoinist) wants you to “make no mistake” about what’s going on…

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