Ban On Staking Crypto – 239

So earlier this week we had the SEC Talking about banning cryptocurrency Staking first reports of this was coming From uh rumors from Brian Armstrong the CEO of Coinbase They said coinbase CEO Brian Armstrong Pitched in on uh pitched in on the Speculation citing that if this SEC ban Staking it could derail the Cryptocurrency markets in terms of Growth the rumors gained momentum after Sec's chair Gary chairman Gary Gensler excuse me Previously stated that cryptocurrencies Allowing staking options could be Classified as Securities under the Howie Test now We've been talking about this for like a Year now I don't I don't even know like Way back when we were talking about Ethereum moving to proof of stake and The risks that that basically entailed It was clear that Gary had already Talked about this they had already made This statement so when the rumors Mill Started spinning here this week I was Like is there anything new here right Because as far as I'm concerned he said This before where is the action right And then what will be the consequential Reaction from the cryptocurrency market If that were to happen In the particular case of ethereum they

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Put themselves in an extremely odd Position moving to proof of stake But where this is actually kind of Coming from is the centralized security Portion where something like FTX is Offering some sort of interest rates on Basically holding your cryptocurrency so It hasn't applied to necessarily yet Something like ethereum in particular Where we have a decentralized system That's staking it that being said could The government find a position of Control over ethereum throughout this And specifically the US government Because a lot of people want to say well You know ethereum's internationally used Blah blah blah sure okay cool until you Look at the actual infrastructure that's Being deployed and we're talking about Over 50 percent of it being in the United States and a majority of that Being on big being hosted on Services by Big Tech so if you want to be completely Honest about what is actually happening Here and if the U.S government would Have some influence over basically Stomping out something like ethereum yes Yes they do because big Tech as you know Is very tightly integrated with the Government and if it came down to push Because push came down to shove you know Having Amazon shut down all servers and All nodes running ethereum nodes right It's going to be done that could be done

Sure can you recover from that host in Different locations yeah presumably that Would be a possibility Now there is this question and we're Miners so we're gonna talk about it There's this kind of thing going around What where people are like oh well would This mean that like ethereum could move Back to proof of proof of work And first of all the answer to that Would be yes they could uh right so is It technically possible for ethereum to Move back to proof of work yes Um would they do it probably not and Then would it solve the problem which is The bigger question and the answer is no And the reason why the answer is no is Because what ethereum does in particular Is that it supports decentralized Finance and just by nature of how that Functions which means every token on top Of The ethereum blockchain Is basically susceptible to this Particular definition of staking options And passing the Howie test meaning that The entire reason that ethereum is So successful Is the exact thing that would basically Make it vulnerable to any laws that Would say that staking is not allowed Every project on top of ethereum would Not be allowed and therefore thereby Every project or ethereum itself whether

It's proof of work or proof of stake Would be susceptible so Even if you had a situation where you Said okay well we'll move to proof of Work to solve this problem it doesn't Actually solve the problem so from the Miners perspective just want to give you Guys that kind of like hey take a step Back look at the big picture here it's It's not it's not that simple right Armstrong mentioned that the SEC Planning to ban cryptocurrency staking Is a terrible idea He said we're hearing rumors that the SEC would like to get rid of crypto Staking in the U.S for retail customers I hope that's not the case as I believe It would be a terrible path for the U.S If that was allowed to happen tweeted Armstrong and here's really where that Comes down to down to is like Understanding that this is in particular Retail customers which as far as I Didn't understand would be specifically Targeting Centralized exchanges that offer staking Services so if you were talking about You know right now as we're aware of it It are being applied to Ethereum specifically as a token or a Coin right then the answer is no but it Will apply to things like Coinbase Kraken which we're going to get into

Here and so on Today's sponsor is BT miners BT miners Has been a long time sponsor of the Channel and a proven reliable source for Asic miners if you're looking to Purchase Asics Hardware from Bitcoin to Dogecoin miners they are available for Purchase on BT miners is a trusted Source by both and Crypto follow the affiliate Link in the description and tell them so Sent you to support the channel So then it kind of gets a little further Down and we can kind of start to talk About Um What is happening with Kraken so what Does kraken's SEC settlement mean for The crypto staking this is coming from Coindesk Kraken has previous or pretty lousy or Had a pretty pretty lousy day but the Industry is more interested in what this Means for staking The Narrative is the U.S Securities and Exchange Commission announce charges Against crypto exchange Kraken on Thursday I'm going to say Creighton Cracking over and over I don't know I Haven't picked one yet alleging its Offering of a crypto staking as a Service program amounted to offering Unregistered Securities products in the

US to settle the charges Kraken is Paying 30 million dollars in shutting All of its U.S staking services The actions raised a number of questions About what this means for staking at Large in the U.S before we get further Into this it's worth defining some terms Proof of stake is a consensus mechanism Wherein nodes are supported by people Locking up or staking their crypto It differs from proof of work consensus Mechanisms in that rather than putting Energy and computing power into securing The blockchain you're putting your in Your money staking has gotten an Increasing amount of attention in recent Years especially in 2022 after ethereum The world's second most valuable Cryptocurrency Network transitioned from Proof of work to proof of stake Companies offer staking services in the U.S because operating your own node just Isn't as easy as letting someone else do It for you he says I'm not judging now We've talked about this before too Though and I've always been against Personally utilizing any centralized Entity to perform your stake and there Still seems to be a lack of education on The topic so let me explain this one More time as it pertains to ethereum in Particular people have been saying That well I can go ahead and pull my my Staked ethereum out that is not the case

That is not what's happening on the Blockchain that is not being recorded as That type of transaction what you're Actually doing is purchasing a token That represents a state ethereum staked Ethereum cannot be unstaked at this time We will see if that is enabled with the Shanghai upgrade understand that the Very nature of you unstaking your Ethereum actually puts the entire Network at risk too because essentially You are taking something that is not Being able to be realized on the market And pretending that it can be right this Has been a problem that we've talked About with ethereum for a long time I Just want to clarify that one more time Before we talk about this some more Coinbase CEO Brian Armstrong raised the Alarm on Wednesday when he tweeted about Rumors the SEC was targeting retail Staking at Large But it seems to me that what's really Happening is the SEC is going after Companies like Kraken which are offering Staking services and promising their Customers some kind of yield Let's look at SEC chair get chair Gary Gensler's own past remarks to set a bit Of a baseline here in September he said Staking could meet the parameters of the Howie test he highlighted intermediaries In an interview with the Wall Street Journal saying staking through an

Intermediary looks very similar with Some changes of labeling to lending some Of the big questions bouncing around After Kraken announcement and to be Quite Frank Armstrong's tweet include Whether the SEC is going after all Staking in the U.S how crypto companies Can actually offer staking services and Whether the SEC would offer any guidance For companies hoping to offer services Without drawing the agency's ire and SEC Official speaking at a media briefing After the settlements announcement told Reporters that the agency basically Looks at the offering of staking service As being similar to offering any other Type of security in other words Companies helping to offer staking Services would have to register as a Securities platform with the regulator Get SEC division incorporation or and Corporation Finance approval to offer The product and file regular disclosures The security in this case was the Investment program itself meaning the Representatives Kraken made in offering The product and the agreement it entered Into with its users another official set SEC commissioner Hester Pierce in one of Her most fiery descents to date pointed Out that the mere Act of registering may Be more complex than at first glance Quote an offering like the staking Service at issue here raises a whole

Host of complicated questions including Whether the staking program had as a Whole would be registered or whether Each token staking program would be Separately registered and what the Accounting implications would be for Kraken she said the officials declined To comment on whether the case had Implications on staking at large another Component of the lawsuit the SEC filed Against Kraken noted that the company Determined what the staking rewards Would be for users the exchange was not Just sending the actual protocol rewards To kraken's investors and this is a Problem that I've had with all of these Centralized entities in general they Promise a certain return and in reality Once again what's happening on the Centralized exchange that you are Utilizing is not what's happening on the Chain and you need to start Understanding how blockchain functions So that you can stop getting screwed Over by centralized entities that do This because You can go into and find success with Adding liquidity in a decentralized Manner that puts the responsibility on You as an individual and also that means It gives you more power over your Decisions you need to understand that This is what is happening and I'm going To restate it over and over again

Because it seems to be that no matter How many times I talk about it I go out Into the real world or I get on Twitter It doesn't actually matter I talk to Someone and they have a complete Misconception of what is actually Happening here And it's and it's a it's a concern right So we need to educate people on this Stuff This may be a big factor here as Attorney Gabe Shapiro points out this Likely does make a big difference Legally an SEC official did say during The briefing the agency couldn't comment Much on this aspect though the official Did say not to read too much into it so Don't read too much into it we're just Coming down on Kraken and it's like okay Well you're going to come down on Kraken Now Mr Gary but you're sitting there Being all buddy buddy with FTX for a While Is it because you don't have control Over Kraken because while I would never Condone that you guys go ahead and sit Out there and participate in what's Happening at Kraken it is important to Note that this is targeted when there Are things going on that need to be Brought into questions specifically with Gary gensler's interaction with FTX and Luckily we do have representative bill I Can't pronounce his name last name I

Apologize going ahead and uh Requesting document for documents Surrounding interactions between the SEC And SPF and FTX uh official here in Particular and this is extremely Important because he brings up a good Point that like Or other people have brought up good Points excuse me in replies and so on That it's like well we're going to come Down on Kraken but what like what was Going on here right So this is the official it's a it's Posted on Twitter uh I think that this Is going to be extremely enlightening Hopefully we get some information out of It Because as we know there's been a lot of Corruption as well surrounding FTX and Uh Basically the U.S government with Alleged even money laundering through The Ukraine government all the way back Through FTX and back to political Donations now My my understanding is most of those Have been returned or donated to other Entities But it does it it still happened right And we see kind of FTX getting off light With even announcing you know a couple Weeks ago or I think it was even last Week they're going to reboot the service And it's like well why are they even

Allowed to reboot but then you're over Here coming down on Kraken my assumption Would be is that Kraken is a lot less Controlled in this particular situation So there you go guys this is everything That is as crazy as it could get within The Realization of the future of digital Finance and I think it's important to Understand as a minor that what this is Going to do is heavily impact the Regulation surrounding uh cryptocurrency In general but you are protected to a Certain extent from a couple of key Investments In particular one being that we're a Proponent of on this particular channel Is is Hardware Period right because at the end of the Day you are going to have a much better And this is you know not Financial Advice but what I would look at Targeting is you're going to have a much Better chance at reselling Hardware at The top of a bull run than you are going To be pulling out your staked ethereum And selling it for so many different Reasons And not only do you have options from a Mining perspective of multiple Algorithms that could be relevant with The any particular heart piece of Hardware But you know you you aren't

Also being stuck well that means that Essentially you aren't being stuck in a Particular ecosystem which means that You have a much more flexible asset Right And yes this does apply to things like Flux nodes and that is why when people Have asked me about flux nodes I don't Say that I think that it's a good idea I Think that if I looked at it from Basically a a position of flexibility With my asset I'm looking at mining Equipment That is how I look at it that being said It's still the same concept you buy low Sell high right it's going to be really Interesting to see luxor's uh Basically eBay or Auction House gets set Up for uh Asic Miners and start to see We're going to start to see real Competitive markets within the Asic Industry and it's so is needed and it's Going to be a completely separate Trading game that you're going to be Able to play this is where I'm focusing A lot of my attention on buying in large Quantity at low prices of Hardware Whether or not you can power it on is Some of the things that I'm personally Looking at thanks for checking out this Clip from the crypto mining show you can Check out the full episode here or more Crypto content down here also I'd like You to check out my locals page at son

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