Rumors that US SEC would like to ban crypto staking

Abiky

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Quote from: zasad@ on February 22, 2023, 10:45:08 AM

https://www.bloomberg.com/news/articles/2023-02-17/binance-holdings-explores-retreat-from-the-us-as-crypto-crackdown-escalates
https://finance.yahoo.com/news/binance-considers-pulling-back-us-153902920.html?
Binance Considers Pulling Back From US Partners as Crypto Crackdown Escalates

"The company, which operates the world’s largest crypto exchange, is weighing the retreat after its relationships with a key banking partner and stablecoin issuer ran into trouble amid intense scrutiny from authorities, according to a person familiar with the issue. Binance has been probed by the Securities and Exchange Commission, Commodity Futures Trading Commission, Justice Department and the Internal Revenue Service.

Binance Holdings is looking at whether to sever ties with intermediary firms such as banks and services firms and is reassessing venture-capital investments in the US, according to the person, who asked not to be identified discussing details that had not yet been made public. It will consider de-listing tokens from any US-based projects, including Circle’s stablecoin USD Coin, the person said."

That's terrible news. I'm not surprised to read about that, especially when the US has been treating crypto with an "iron fist". Too much restrictions will force crypto businesses to close their doors within the country. That means less tax revenue for the US government. It seems the US is doing this to prevent the US Dollar from losing strength in the mainsteam world. After all, it doesn't want the USD being replaced by another currency as the world's reserve currency. The US will eventually lose as the de-dollarization process has already begun. Countries are adopting alternative currencies at a fast pace (like Bitcoin), so it should only be a matter of time before the USD becomes history.

The SEC might've gone against centralized crypto staking, but that doesn't mean it won't continue to escalate. They might go after decentralized staking platforms if they deem PoS to be a security. I can see how ETH would face further opposition down the road from the US government. Maybe this would be Europe's opportunity to become the next crypto/Blockchain hub? Just my opinion

so98nn

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Well they are stopping the staking due to improper operations that are followed by the centralized exchangers. I also heard that they are having such issues because of what happened last year with the FTX issues and other small to big exchanges. The problem in staking is, we literally give away our money in the hands of an exchanger for specific period. So for example if I am staking for 1 year period of time then that is officially their money and they can do whatever the hell they want with it. Over the period of time big company CEO's and owners are using these reserved funds to expand their operations and also use it for personal purposes and most of the entries are missing from the accounting books. This threatens the "savings" of an individual who is staking the money. This is SEC's one of the best decision ever. I think all the operations should move towards PoW and have real mining firing up the way coins work.

Oneandpure

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Seems not rumor but have been fact about SEC investigating and try to banned some cryptocurrency staking coins, this time I agree with SEC investigated and their decision to banned with cryptocurrency staking. There are many unacceptable staking coins by giving higher APY reward but bad impact later after staking running price dropped drastically.

I don't know when SEC will adopt this rule and start investigating or banned several cryptocurrency staking coins and restrict access with their country area with coins staking potential become scam later.

zasad@

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https://www.bloomberg.com/news/articles/2023-02-17/binance-holdings-explores-retreat-from-the-us-as-crypto-crackdown-escalates
https://finance.yahoo.com/news/binance-considers-pulling-back-us-153902920.html?
Binance Considers Pulling Back From US Partners as Crypto Crackdown Escalates

"The company, which operates the world’s largest crypto exchange, is weighing the retreat after its relationships with a key banking partner and stablecoin issuer ran into trouble amid intense scrutiny from authorities, according to a person familiar with the issue. Binance has been probed by the Securities and Exchange Commission, Commodity Futures Trading Commission, Justice Department and the Internal Revenue Service.

Binance Holdings is looking at whether to sever ties with intermediary firms such as banks and services firms and is reassessing venture-capital investments in the US, according to the person, who asked not to be identified discussing details that had not yet been made public. It will consider de-listing tokens from any US-based projects, including Circle’s stablecoin USD Coin, the person said."

____
UPD
https://twitter.com/cz_binance/status/1626617772019965952
CZ 🔶 Binance
4. False.

Abiky

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Quote from: o48o on February 16, 2023, 07:09:01 AM

Nope, as it isn't ban on staking, it's banning cex staking services (for U.S. clients for now). People can run nodes by them as they wish. But CEX:es promising to give interest to hodl money locked in there is going to be a service of the past. At least for regulated exchanges. I think that kraken was just an example. We will hear more about this when we get more details but trying ban POS would be just moronic move from them that would be laughed out from in any court.

The US government will ban centralized staking platforms for now. But it could decide to go after decentralized staking if it wants to. All it has to do is go after the developers of the original project to hold them accountable for their actions. Of course, it's not as easy as it sounds. If developers are anonymous, then it will be impossible for them to meet with the governments' demands. It's all a "cat and mouse" game.

I've seen the SEC taking a hard approach against crypto lately, so don't expect crypto businesses to thrive in the US anytime soon. The more the US treats crypto with an "iron fist", the more businesses will flock to other countries. This will be a huge loss for the US in the long run. Who knows if the EU takes the reigns as the world's leading crypto hub? Just my opinion

o48o

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Quote from: samcoin on February 13, 2023, 03:58:55 PM

Despite the debate about whether the stacking ban news is FUD or not, it brought something to my mind, which is the ban of stacking would encourage projects to return to the POW consensus, and that would waste the efforts spended to reduce the enviromental effects of crypto currencies. In my opinion, a complete ban on stacking won't happen and can't happen, because it terminates the development of the whole crypto industry.

Nope, as it isn't ban on staking, it's banning cex staking services (for U.S. clients for now). People can run nodes by them as they wish. But CEX:es promising to give interest to hodl money locked in there is going to be a service of the past. At least for regulated exchanges. I think that kraken was just an example. We will hear more about this when we get more details but trying ban POS would be just moronic move from them that would be laughed out from in any court.

Abiky

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Quote from: dbshck on February 11, 2023, 05:29:01 AM

Yeah for now it's just a ban on centralized staking, like Kraken and Coinbase did. It doesn't affect liquid staking service like Lido and solo staking for now, but who knows. It's unlikely but the SEC might be going for them too in the future.

In fact, the market is taking this as a good news for liquid staking tokens (e.g. LDO, RPL). This news, along with the upcoming Shanghai update, was the catalyst for the brief pump a few days ago although most of the upside has been retraced now.

They will begin by targetting every centralized exchange that provides staking services to US-based customers. Then, they will escalate to decentralized staking protocols by imposing a fine to the original developers of the project. That is if they're able to successfully identify such developers. Just because it's "decentralized", doesn't mean it's immune from government interference. Only a combination of decentralized and censorship-resistant techniques would render governments' efforts worthless.

I'm afraid there will be more pain ahead for crypto-related businesses in the US. If regulatory pressure continues, there will be an exodus of US-based crypto companies to other regions of the world. Maybe it's time for the UK or El Salvador to become the next crypto hub for businesses to blossom? I wouldn't worry much about the SEC, as long as crypto/Blockchain tech remains decentralized and censorship-resistant. Just my opinion

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Quote from: dbshck on February 14, 2023, 08:29:49 AM

Quote from: BitDane on February 13, 2023, 04:56:06 PM

So it is not the Proof of stake that the US SEC that are banning but rather a feature of staking on centralized exchanges. I wonder what trigger the SEC to restrict centralized exchanges of implementing staking program? Did they see the staking program as a Ponzi Scheme that will give a devastating blow to late comers?

Yeah currently just the centralized service. Not sure why, I guess they just want to hit crypto. First Kraken, then Paxos. We might see more firms getting sued.

There's a video of Gary Gensler interview with Andrew Ross Sorkin a few days ago. In the interview he said:

Quote from: https://www.cnbc.com/video/2023/02/10/short-sec-chair-gensler-heres-why-we-cracked-down-on-kraken.html

Kraken knew how to register, others know how to register, it's just a form on our website. And if they want to offer staking, we're neutral, come in, register because investors need that disclosure.

I mean obviously, this is not the case. If registering is as easy as filling a form, Kraken would rather do that than paying millions in fines and closing down their staking service.

It seems to me that in the case of Paxos this is specially done to hurt Binance because it is Binance that issues BUSD. By the way I heard it was not an SEC initiative but a complaint from Coinbase. So maybe this is the American answer for what CZ did with FTX. Maybe now some people want to attack Binance and are looking for weaknesses.

dbshck

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Quote from: BitDane on February 13, 2023, 04:56:06 PM

So it is not the Proof of stake that the US SEC that are banning but rather a feature of staking on centralized exchanges. I wonder what trigger the SEC to restrict centralized exchanges of implementing staking program? Did they see the staking program as a Ponzi Scheme that will give a devastating blow to late comers?

Yeah currently just the centralized service. Not sure why, I guess they just want to hit crypto. First Kraken, then Paxos. We might see more firms getting sued.

There's a video of Gary Gensler interview with Andrew Ross Sorkin a few days ago. In the interview he said:

Quote from: https://www.cnbc.com/video/2023/02/10/short-sec-chair-gensler-heres-why-we-cracked-down-on-kraken.html

Kraken knew how to register, others know how to register, it's just a form on our website. And if they want to offer staking, we're neutral, come in, register because investors need that disclosure.

I mean obviously, this is not the case. If registering is as easy as filling a form, Kraken would rather do that than paying millions in fines and closing down their staking service.

uneng

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Quote from: wiss19 on February 13, 2023, 05:53:32 AM

Quote from: Xal0lex on February 12, 2023, 05:07:36 PM

Another FUD was brought to the market. No wonder, after all this growth, now you need a reason to drop the price. I'm sure there will be no ban on staking. Ethereum just moved to PoS and is now, for the most part, controlled by American companies. Banning staking means banning all Ethereum. No one will take that step, it's like trying to ban bitcoin mining. This is another speculation designed to temporarily destabilize the crypto market.

I think this wasn't just a simple FUD but I read somewhere that some platforms are already being fined by the SEC only because they offer staking along with the other service that they offered. I think if they can't pay they will be forced to shut down and if ever they pay they can continue but with no more staking feature.

I don't think SEC does this to disrupt the growing price of Bitcoin but I believe they do such thing because they are already sick and tired of seeing those staking platforms or projects who promised to offer a huge APY/APR when most of them are just scams. ETH on the other hand is not included about this matter.

It was Kraken, fined in 30$ million dollars. Probably they won't shut down, rather they will be just unavailable for US citizens. I fear the impacts on crypto market are going to be negative with this SEC measure against crypto services, because US market is a very wealthy and impacting one for crypto investments. Since they can't stake anymore, I believe that money could leave crypto industry, pushing prices in general down.

BitDane

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Quote from: ivankoh on February 11, 2023, 04:43:34 PM

Quote from: dbshck on February 11, 2023, 05:29:01 AM

Quote from: o48o on February 09, 2023, 06:24:00 PM

Just saw that. So this isn't ban on staking really, it's ban on centralized third party services like exchanges used for staking?

While this will bring prices down, this could actually be good for decentralization. People would need to run their own nodes if staking as a service is not an option anymore.

Will this affect on staking services like Lido DAO as it isn't maintaining eth infrastructure either or are they too decentralised for control?

Yeah for now it's just a ban on centralized staking, like Kraken and Coinbase did. It doesn't affect liquid staking service like Lido and solo staking for now, but who knows. It's unlikely but the SEC might be going for them too in the future.

In fact, the market is taking this as a good news for liquid staking tokens (e.g. LDO, RPL). This news, along with the upcoming Shanghai update, was the catalyst for the brief pump a few days ago although most of the upside has been retraced now.

Yes, I agree! Kraken and Coinbase are holding a combined 33% of all tokens staked. The SEC has shown that they will continue to tighten regulations on centralized exchanges (after FTX ends), they have reason to do so. I believe it would be a strategic mistake to let momentum pass without a representative value that accurately reflects the shifting structure of the market. That is also the reason why LDO, RPL, FXS are tightening short-term uptrend. If the SEC continues to act, Once again decentralization is the way market demand goes.

So it is not the Proof of stake that the US SEC that are banning but rather a feature of staking on centralized exchanges. I wonder what trigger the SEC to restrict centralized exchanges of implementing staking program? Did they see the staking program as a Ponzi Scheme that will give a devastating blow to late comers?

samcoin

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Quote from: cryptoaddictchie on February 09, 2023, 12:39:13 AM

Ive just saw this tweet from Brian of Coinbase and its a big fud or a terrible rumor for altcoins. SEC wanted to crucify crypto staking in the US does considering the staking method as security. Of course this is debatable but some investor would feel bad for this news if ever they push through with this path. What can you say about this?

Source:
https://twitter.com/brian_armstrong/status/1623459203150131201?t=Tga5cATKNVjhBk7rMgCJyw&s=19

Despite the debate about whether the stacking ban news is FUD or not, it brought something to my mind, which is the ban of stacking would encourage projects to return to the POW consensus, and that would waste the efforts spended to reduce the enviromental effects of crypto currencies. In my opinion, a complete ban on stacking won't happen and can't happen, because it terminates the development of the whole crypto industry.

wiss19

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Quote from: Xal0lex on February 12, 2023, 05:07:36 PM

Another FUD was brought to the market. No wonder, after all this growth, now you need a reason to drop the price. I'm sure there will be no ban on staking. Ethereum just moved to PoS and is now, for the most part, controlled by American companies. Banning staking means banning all Ethereum. No one will take that step, it's like trying to ban bitcoin mining. This is another speculation designed to temporarily destabilize the crypto market.

I think this wasn't just a simple FUD but I read somewhere that some platforms are already being fined by the SEC only because they offer staking along with the other service that they offered. I think if they can't pay they will be forced to shut down and if ever they pay they can continue but with no more staking feature.

I don't think SEC does this to disrupt the growing price of Bitcoin but I believe they do such thing because they are already sick and tired of seeing those staking platforms or projects who promised to offer a huge APY/APR when most of them are just scams. ETH on the other hand is not included about this matter.

romero121

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The market is speculative and often there needs something that could make the market move upwards and downturn. The market had experienced a forward push from the price around $17k and now stabilizing around $22k. By the time more things happen, as the market tend to move sideways. What is being circulated is kind of FUD that could drag the market downwards and make way for Whales to invest big. This is the common practice and now people doesn't let it happen as they've well understood the market.

judeafante

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Quote from: cryptoaddictchie on February 09, 2023, 01:49:12 AM

Quote from: Apocollapse on February 09, 2023, 01:34:56 AM

I agree with US SEC to ban crypto staking because it's a complete scam because it work similar like banking interest account, we're stake our token in untrusted centralized pool and it either get hacked or the pool's owner stole everyone tokens.

Im not saying Im agreed. But not all staking pools were scam. Maybe I am bias since I had a lot of staking tokens that has been resting on a non custodial approach. Yes it may fall off due to dividend similarities however, its a necessary for some nodes to have stake to run the ecosystem. If they were to ban this, most centralized exchange offerinf this might suffer. Though Id really think this is just a big fud over a part of cryptocurrency utility called staking.

Staking is already part of the Cryptocurrency industry its just some scam pools are making them bad there's a certain risk attached to it, but between banks and Staking interest I'll go for Staking interest already made a profit from the right pool I stake my Coins I just can't imagine Staking gone from Cryptocurrency ecosystem when Ethereum the number two coin in the market is now in Staking, there could be disruption if they will do that, I don't think it will gain support and many investors and supporters of staking will oppose this.

iv4n

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Quote from: JANUS23 on February 12, 2023, 04:11:46 PM

I think it is for crypto staking on cexes and not dexes. So you instance there and stake on the dex

Well, CEX is regulated and should follow some rules and regulations, staking on CEX exchange is not the same as "staking on-chain", at least I think it's like that. Rules and regulations, each country have some stupid ones... But whatever it is, I am sure that some (if not a lot) US citizens will find a way to continue with staking on some CEX-es like they find a way to gamble in crypto casinos that don't accept players from the US.

Quote from: Xal0lex on February 12, 2023, 05:07:36 PM

Another FUD was brought to the market. No wonder, after all this growth, now you need a reason to drop the price. I'm sure there will be no ban on staking. Ethereum just moved to PoS and is now, for the most part, controlled by American companies. Banning staking means banning all Ethereum. No one will take that step, it's like trying to ban bitcoin mining. This is another speculation designed to temporarily destabilize the crypto market.

I agree with you... this situation is about Kraken and its service, it's not about "staking" in general. But people like to create drama and FUD, sensational headlines get all the attention.

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Quote from: Xal0lex on February 12, 2023, 05:07:36 PM

Another FUD was brought to the market. No wonder, after all this growth, now you need a reason to drop the price. I'm sure there will be no ban on staking. Ethereum just moved to PoS and is now, for the most part, controlled by American companies. Banning staking means banning all Ethereum. No one will take that step, it's like trying to ban bitcoin mining. This is another speculation designed to temporarily destabilize the crypto market.

A normal whale price manipulation, they are hoping for another drop so they can still buy cheaper coins well they succeeded on this but its good to see Bitcoin is still doing great on its current price. Banning staking have pros and cons, but without any official statement from SEC you can consider this as a FUD and of course never believe on this or else you will panic as well. The market is getting better, expect more FUD like this since many wants to manipulate the price, either you can ride with them or you’ll take the safe side.

Xal0lex

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Another FUD was brought to the market. No wonder, after all this growth, now you need a reason to drop the price. I'm sure there will be no ban on staking. Ethereum just moved to PoS and is now, for the most part, controlled by American companies. Banning staking means banning all Ethereum. No one will take that step, it's like trying to ban bitcoin mining. This is another speculation designed to temporarily destabilize the crypto market.

o48o

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Quote from: Abiky on February 12, 2023, 03:15:33 PM

I don't think DEXs will be safe from the SEC's "hands", especially when most of them aren't as decentralized as they claim to be. Nowadays, it's easy to take down a DEX by censoring the domain or going after the developers of the project. The SEC might decide to fine the developers of a DEX if it deems its stakable coins as a security. You really can't avoid the government, unless you make everything truly decentralized and censorship-resistant. With the SEC penalizing Kraken for providing staking services to US-based customers, the crypto industry will be set towards a dark future (at least within the US). I'd imagine other exchanges like Coinbase and Binance being fined by the SEC later on.

The US is being too strict against crypto/Blockchain tech, and that's going to cost it dearly in the long run. New crypto-related businesses and even existing ones will close their doors to US-based customers because of tight regulations. Countries in the EU have a much softer stance towards crypto/Blockchain tech (AFAIK) so it's likely innovation will blossom there. Unless US government officials rethink their way towards regulating crypto, the industry won't be going anywhere soon. Just my thoughts Grin

Agreed, most dexes will definitely comply with regulators and blacklist wallets if they are told to. And it's not only US that's going to be strict. Anyone who wants to do business with US want to comply with their set of rules. We have been slowly moving away from the golden era of pseudonymity and soon there's no such thing as anonymity when it comes to cash. We should enjoy it while we can.

And for some reason people see US as the regulation leader, while 200+ jurisdictions are obeying FATF recommendations. And may i point out that US didn't build FATF.

BIT-BENDER

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Another rumor that would jus faze out very soon, if I get a penny for everytime a rumor about US or some big nations of the world plan to ban Crypto-currency or any affiliate I think I would be a millionaire by now.

I don’t think they have any grounds against staking and I see no security concerns on it, I would rather see it as system of making sure a transaction is carried out. Besides not all Crypto-currency holders stake. I actually don’t do that.

Topic: Rumors that US SEC would like to ban crypto staking (Read 356 times)