Cryptos Fall Amidst SEC Move On Kraken

Crypto prices plunged 4.6 percent in the past 24 hours amidst the Securities and Exchange Commission’s announcement of charges against crypto exchange Kraken. Kraken has been charged with failing to register the offer and sale of their crypto asset staking-as-a-service program.

The regulatory crackdown on Kraken has shaken the industry and overall crypto market capitalization has fallen to $1.01 trillion, versus $1.06 trillion a day earlier. Close to 95 percent of the top 100 cryptocurrencies are trading in the overnight red zone.

According to the SEC, Kraken has offered and sold its crypto asset “staking services” whereby it pools certain crypto assets transferred by investors and stakes them on behalf of those investors, to the general public since 2019.

The SEC’s complaint states that Kraken not only offered investors outsized returns untethered to any economic realities, but also retained the right to pay them no returns at all. Further, it provided them zero insight into its financial condition and whether it even had the means of paying the marketed returns in the first place.

Kraken would discontinue the unregistered offer and sale of crypto asset staking-as-a-service program and pay $30 million to settle SEC’s charges.

Bitcoin touched a three-week low of $21,738.33, whereas Ethereum is trading at $1,539.04. While market leader and Proof-of-Work based Bitcoin shed 4.2 percent, losses in Ethereum which transitioned to Proof-of-Stake consensus in September 2022 were higher at 6.2 percent. The regulatory move on the staking service has dampened the sentiment for Ethereum ahead of the Shanghai upgrade scheduled for March 2023, which would allow validators to withdraw the staked ETH.

Alongside Ethereum, other Proof-of-Stake cryptocurrencies also lost heavily. 8th ranked Cardano (ADA) shed 6.8 percent whereas 11th ranked Solana (SOL) dropped 9.1 percent in the past 24 hours. 25th ranked Toncoin (TON) declined 6.3 percent. 36th ranked Algorand (ALGO) and 51st ranked Tezos (XTZ) also shed more than 8 percent in the past 24 hours.

95th ranked dydx (DYDX) and 59th ranked Frax Share (FXS) are the biggest laggards in the past 24 hours with an overnight decline of more than 17 percent.

40th ranked The Graph (GRT), 42nd ranked Fantom (FTM), 77th ranked Optimism (OP), 85th ranked Enjin Coin (ENJ), 29th ranked Aptos (APT), 50th ranked Axie Infinity (AXS), 49th ranked Theta Network (THETA), 35th ranked Apecoin (APE), 64th ranked PancakeSwap (CAKE), 96th ranked Terra (LUNA) and 33rd ranked NEAR Protocol (NEAR) have all shed more than 10 percent in the past 24 hours.

Lido DAO (LDO), a staking service for Ethereum 2.0 shed 11 percent overnight but is still holding on to gains of more than 7 percent in the past week.

31st ranked Hedera (HBAR) is the highest-ranking cryptocurrency to trade in the overnight green zone. HBAR has added 7.5 percent overnight. 61st ranked Mina (MINA) has gained 12 percent overnight. 78th ranked Loopring (LRC) also withstood the sell off to make overnight gains of close to 1 percent.

Singularity Net (AGIX), a crypto token tagged to the AI industry is the top gainer on a year-to date basis with total gain of 800 percent in 2023. Aptos (APT) has gained 261 percent whereas The Graph (GRT) and Immutable X(IMX) have gained more than 160 percent in the year 2023.

25th ranked Toncoin (TON), 22nd ranked UNUS SED LEO (LEO), 60th ranked Bitcoin SV (BSV) and 56th ranked Huobi Token (HT) continue to be loss-making on a year-to date basis.

Meanwhile, shares of Coinbase Global are currently trading close to 2 percent lower, even as CEO Brian Armstrong expressed apprehensions about a potential staking ban by the SEC.

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