Cryptocurrencies, blockchain, NFT and new trends

US SEC Crypto Staking Crackdown Benefits DeFi Services

Decentralized finance protocols such as Lido, Rocket Pool, and StakeWise may benefit from the U.S. Securities and Exchange Commission (SEC) crackdown against crypto staking services, reported Bloomberg on February 10.

However, the decentralized staking protocol will benefit only if they avoid a similar regulatory action by the SEC or other regulators in the future.

How Crypto Staking Crackdown To Help Decentralized Services

On Thursday, U.S.-based crypto exchange Kraken settled SEC allegations of the unregistered offer and sale of securities through its staking-as-a-service program. The crypto exchange paid $30 million and agreed to discontinue the service in the US.

Many in the DeFi community believe the autonomous aspect led to decentralized finance (DeFi) apps falling outside the guidelines of regulators as “no individual benefits directly.” People use these DeFi apps to trade, lend and borrow without intermediaries through the use of automated protocols.

Henry Elder, head of decentralized finance at Wave Financial, said:

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Staking involves earning rewards and yields by locking up crypto tokens on the protocol that help order transactions on various blockchains such as Ethereum. Crypto exchanges such as Coinbase, Kraken, and Binance have introduced staking services to increase their revenues.

Austin Campbell, an adjunct professor at Columbia Business School, asserts crypto staking crackdown is definitely good news for on-chain direct staking and decentralized platforms in the short term. However, it’s too early for DeFi to call it a win. Regulators are more likely to intervene and order platforms to register with them, similar to what’s happening with crypto exchanges.

Also Read: “Operation Choke Point 2.0”: Is US Planning Crackdown Against Crypto Market?

Lido DAO (LDO) and Rocket Pool (RPL) Price Jump

Lido DAO (LDO) and Rocket Pool (RPL) prices have skyrocketed by 25% and 30%, respectively, in the last two days.

RPL price is currently $54.48, up 17% in the last 24 hours. Meanwhile, the LDO price is trading at $2.68, down just 2% in the last 24 hours.

Also Read: SEC Commissioner Hester Peirce Denounces Agency’s Crackdown on Kraken’s Staking Service