The broader cryptocurrency market bleeds on Thursday as the United States Securities and Exchange Commission came down heavily on a popular US crypto exchange, Kraken. A move which saw many crypto assets recording a double-digit loss.
Amid this disappointing news, Bitcoin fell below $22,000 for the first time in three weeks while the crypto market lost more than $40 billion from its market cap, data from CoinGeko reveals.
At the moment, the flagship cryptocurrency is trading under pressure as it struggles to scale above $22,000 with support at $21,500, data from Binance shows.
Investors King learnt that the crypto industry was shocked on Wednesday when the U.S. The Securities and Exchange Commission (SEC) slapped Kraken with a fine of $30 million for violating securities laws after it failed to register the offer and sale of its staking-as-a-service program.
Although Kraken did not confirm or deny the allegations about the SEC’s complaint, the exchange however agreed to halt its staking service for U.S. clients, a bad development which led to the recent market downturn.
Reacting to the issue, a number of industry players have expressed the negative impact it can have on the broader crypto industry.
For example, the Head of Research at Matrixport, Markus Thielen noted that “the SEC enforcement is negative for the industry”.
Coinbase CEO Brian Armstrong also took to Twitter to deliver a lengthy thread on what he called “rumours that the SEC would like to get rid of crypto staking in the U.S. for retail customers.”
“I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen,” he said.
“Staking is a really important innovation in crypto” as it “allows users to participate directly in running open crypto networks” and “brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints,” Brain Armstrong added.