United States of America: Reached settlement in the SEC lawsuit against Payward Ventures and Payward Trading (Kraken) for providing unregistered securities

On 9 February 2023, the Securities and Exchange Commission (SEC) filed a lawsuit against Payward Ventures and Payward Trading (Kraken) for the unregistered offer and sale of crypto asset staking and reached a settlement with the company. Kraken has agreed to cease offering the program in the US and pay a fine of USD 30 million to settle the charges. In particular, the SEC alleges that since 2019, Kraken has combined crypto assets from different investors and staked them on their behalf. Investors who hold "proof-of-stake" assets pledge them to a blockchain address, for which they will receive dividends. According to the SEC, Kraken has offered the Kraken Staking Program as a security, making it subject to federal securities laws requiring registration. The final judgment would impose on Kraken a prohibition from violating Section 5 of the 1993 Securities Act as well as ceasing the offering of the Kraken Staking Program in the US.