SEC crackdown could ‘benefit’ decentralized staking if it isn’t banned – Lido exec SEC crackdown could ‘benefit’ decentralized staking if it isn’t banned – Lido exec
Lido Finance's Jacob Blish said if the SEC bans U.S. citizens from interacting with any staking protocols, it could hurt both investors and contributors.
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Updated: Feb. 13, 2023 at 10:10 am UTC
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Jacob Blish, head of business development at the decentralized autonomous organization (DAO) that runs Lido Finance, said the SEC’s enforcement actions are likely a “net benefit” for decentralized liquid staking providers but added that it “really depends on what the final resolution is,” Bloomberg News reported.
Blish said there is uncertainty regarding the decision-making process of the SEC, which has created confusion. He said:
“The most disappointing thing is we as an industry keep getting asked for transparency, but then me as a U.S. citizen, I get no transparency and how [the regulatory] decision-making process is going.”
According to Blish, decentralized staking platforms like Lido act as the “plumbing” required in a staking service. The platforms offer a software service, and it is up to the user whether to use it or not — the user has “full control.”
This differs from how staking provided by centralized exchanges works, where users hand over the control of assets to the exchange.
Blish’s comments follow Kraken’s $30 million settlement with the SEC and the closure of its staking service in the U.S. The SEC claimed that Kraken provided unregistered securities through its staking service.
According to Blish, the most significant risk of the SEC’s enforcement action against Kraken is a prohibition on U.S. citizens from interacting with or contributing to staking protocols.
He added that an outright ban on crypto staking participation could not only stop users from staking assets but could also potentially force contributors to abandon projects.
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Monika Ghosh
In 2020, Monika immersed herself in crypto, maintaining skepticism yet firmly believing blockchain could address key issues like financial disparity and transparency. A book-lover, she's also a passionate food enthusiast.
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Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.