Decentralized finance may benefit from the SEC’s decision to shut down staking by cryptocurrency exchanges

The U.S. Securities and Exchange Commission has forced the Kraken cryptocurrency exchange to shut down its staking service and pay $30 million in fines. 

It’s part of a crackdown on such staking services. Let’s examine the mechanics of staking and explore the reasons why shutting them down may benefit decentralized finance (DeFi). 

Fed chair Gary Gensler says there’s no guarantee exchanges are actually staking their customers’ crypto to certify blockchain transactions.

Unlike Bitcoin, the Ethereum network is a “proof-of-stake” (PoS) blockchain that adds transactions through a process called validation. 

Anybody can...

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