Kraken Revives Crypto Staking in 39 States Amid Evolving Regulations

Kraken Resumes Crypto Staking Services in 39 States Amid Evolving Regulations and Legal Challenges

Cryptocurrency exchange Kraken has reinstated its crypto staking services in 39 U.S. states, marking a significant shift in the country's regulatory environment. The move comes nearly two years after Kraken halted its staking services due to legal action from the SEC.

Changes in the SEC's stance on crypto have given a boost to Kraken's crypto staking services. The exchange has introduced third-party slashing insurance to add protection for U.S. users' staked assets.

Kraken has been expanding its offerings beyond staking. In December, the company launched Ink, a Layer-2 blockchain designed to enhance decentralization and interoperability.

Despite the easing regulatory stance in the U.S., Kraken continues to face legal battles. A federal judge recently dismissed the company's argument that the SEC lacks authority over crypto under the "major questions doctrine." However, Kraken can still challenge the case by asserting that it did not receive clear guidance that its services violated securities laws based on the Howey test.

Outside the U.S., Kraken's Australian subsidiary was fined $8 million by the Australian Securities and Investments Commission (ASIC). Regulators found that the platform offered unauthorized margin trading products to over 1,100 customers. It failed to comply with regulatory requirements, including the lack of a target market determination (TMD). ASIC cited these shortcomings as contributing to significant investor losses.

Kraken has decided to discontinue its NFT marketplace by February 27, 2025. The company will reallocate resources to other ventures as the NFT sector struggles with declining trading activity, oversaturation, and diminishing asset values.