The Blockchain Association, a cryptocurrency lobbying organization based in Washington DC, has called on Congress’s intervention to stop the Securities and Exchange Commission’s (SEC) enforcement crackdown against crypto staking service providers. 

Kristin Smith, the Blockchain Association’s CEO, released an official statement on February 9 regarding the SEC’s recent settlement agreement with crypto exchange Kraken over unregistered staking offerings in the U.S. 

According to Smith, staking is an integral part of the crypto ecosystem, enabling users to earn passive income on their crypto holdings. 

“The SEC continues its attack on U.S. crypto companies and retail investors, regulating by enforcement and undercutting the potential of public blockchain networks in the United States. Staking is an important part of the crypto ecosystem, allowing individuals to participate in decentralized networks and giving investors more options to earn passive income,” he said.  

Kraken Agrees to Pay $30 Million in Penalty 

On Thursday, the SEC charged Kraken, through its U.S. subsidiary Payward, for violating securities laws and failing to register the offer and sale of its on-chain staking program dubbed staking-as-a-service to U.S. customers. 

Without disputing the allegations and crimes, the exchange agreed to pay $30 million in penalties to settle the SEC’s charges. The company also agreed to stop offering its American customers the services. 

Blockchain Association Calls on Congress 

Reacting to the settlement, Smith shared his displeasure on the issue, calling on Congress to step in and provide an adequate regulatory framework to police the emerging technology. 

The Washington-based non-profit organization is concerned about the aftermath of the SEC’s attack on crypto in the U.S., noting that the country risks driving away innovation if the regulator continues on the rampage. 

“Today’s settlement isn’t law, but it is another example of why we need Congress – not regulators – to determine appropriate legislation for this new technology. Otherwise, the U.S. risks driving innovation offshore and taking online freedoms away from individual users,” Kristin Smith. 

Meanwhile, the SEC has been going after companies that provide crypto-related products and services in the U.S. 

Last month, the regulator charged two crypto companies, Genesis and Germini, for offering and selling unregistered securities to retail investors through the Gemini Earn Program. 

The SEC alleged that the crypto services were not adequately registered under its jurisdiction, violating U.S. securities laws. 

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