BTCS Clarifies its Staking Operations In Response to the Recent SEC Complaint Against Kraken
10 Février 2023 - 5:45PM
BTCS Inc. (Nasdaq: BTCS) (“BTCS” or the “Company”), a blockchain
technology-focused company, clarified today how StakeSeeker, its
non-custodial staking-as-a-service platform, differs from other
industry staking programs.
On February 9, 2023, the Securities and Exchange
Commission (“SEC”) charged Kraken with failing to register the
offer and sale of their crypto asset staking-as-a-service program,
whereby investors transfer crypto assets to Kraken for staking in
exchange for advertised annual investment returns of as much as 21
percent. BTCS’s non-custodial staking-as-a-service platform,
StakeSeeker, differs from Kraken's custodial model in several key
material ways.
The current test to determine if an offering is
a security is the Howey test, which can be summarized as an
investment of money in a common enterprise with the expectation of
profits solely from the efforts of others.
Kraken's custodial model:Key Howey Test
Components:
- They take control of your crypto
assets
- They pool your crypto assets with
others (common enterprise)
- There is an expectation of profit
from their efforts
Other key factors:
- They determine the annual
percentage return (“APR”) and have right to change at their
discretion
- They offer instant rewards and
instant unstaking
- Customers earn passive rewards
- Fees are located in Terms of
Service documents
- They need stringent cybersecurity
measures
- They claim high annual returns
BTCS’s non-custodial StakeSeeker model:Key Howey
Test Components:
- We do not take
control of your crypto assets or crypto rewards
- Since we don't have control of your
crypto assets, we can’t pool them
- While there is an expectation of
profit, we believe our work is ministerial in nature
Other key factors:
- The respective blockchains
determine both the APR and directly pay the crypto asset rewards to
the delegator, not us
- Both the reward frequency and
unstaking is determined by the respective blockchain protocol
- We don’t have customers; delegators
are active and participate in a respective blockchain consensus
mechanism by staking their crypto assets
- Our fees are publicly available
both on our website and broadcast to the respective blockchain
protocols
- While we have strong cybersecurity
measures in place, we don’t have control over your crypto assets
and you are depending on the security of the respective blockchain
to keep your crypto assets secure
- We clearly disclose that
StakeSeeker returns are estimated based on reported network
data.
“SEC Commissioner Gary Gensler clearly stated in
his video tweet, “Not your Keys, Not your Crypto”, and we couldn't
agree more,” stated Charles Allen, BTCS’s CEO. “When you stake with
us, you are not an investor in our platform. You are a delegator to
our nodes. If we go bankrupt, you do not get in line because we
don't have your crypto assets, you unstake them and move on,”
continued Allen. We encourage investors to watch Commissioner
Gensler’s video tweet.
“As the oldest public company in the crypto and
blockchain sector, we've learned many lessons over the years. For
example, we once held crypto at Mt. Gox but luckily withdrew it
prior to its implosion. We learned from that near miss in 2014 and
keep minimal crypto at exchanges,” said Charles Allen. In light of
FTX, it's time to get educated and take control of your crypto
assets. Your keys, your crypto. When you stake
with us, you are participating in a blockchain's consensus
mechanism, and you do not transfer ownership of your crypto assets
to us.
In light of recent failures such as FTX,
Blockfi, and Celsius we encourage investors and crypto enthusiasts
alike to learn about the value proposition of our non-custodial
staking model. Your keys, your crypto, stake
(not steak) with us.
Many investors ask why we don’t offer staking
for Ethereum, and the reason is simple. It’s a proof-of-stake
blockchain, not a delegated proof-of-stake blockchain, and in our
opinion, there isn't currently a clear path to offer Ethereum
staking without inadvertently creating a security. While we believe
our non-custodial staking does not create securities, we can
provide no assurances that either the SEC or other regulatory
authorities will agree.
What is
StakeSeeker?StakeSeeker is a
leading crypto dashboard that offers a unique solution for crypto
holders to manage and grow their digital assets. StakeSeeker sets
itself apart by solving the common problem of central tracking for
crypto holdings stored on various exchanges and digital wallets,
providing crypto holders with an improved user experience and the
ability to easily track and analyze the performance of their entire
portfolio. The platform combines innovative portfolio analytics and
a simplified staking process, all in one place. With StakeSeeker,
crypto holders can earn rewards by staking through the
non-custodial Stake Hub and evaluate their portfolios across
multiple exchanges and wallets with ease. The platform was
developed to empower crypto holders, to self-custody their crypto,
and to better understand and grow their digital asset holdings
through a secure platform.
For more details on StakeSeeker and the value it
creates for crypto holders, please visit
https://stakeseeker.com/.
About BTCS:BTCS Inc. is a
Nasdaq listed company operating in the blockchain technology space
since 2014 and is one of the first U.S. publicly traded companies
with a primary focus on blockchain infrastructure and staking. BTCS
secures and operates validator nodes on disruptive next-generation
blockchain networks that power Web 3, earning native token rewards
by staking our proof-of-stake digital assets. “StakeSeeker” is
BTCS’ newly introduced proprietary Cryptocurrency Dashboard and
Staking-as-a-Service platform, developed to empower users to better
understand and grow their crypto holdings with innovative portfolio
analytics and a non-custodial process to earn staking rewards on
digital asset holdings. Users can easily link and monitor their
cryptocurrency portfolios across exchanges, wallets, validator
nodes, and other sources; and have access to a suite of data
analytic tools such as performance and reward tracking.
StakeSeeker’s Staking Hub allows users to earn rewards by
participating in network consensus mechanisms by staking and
delegating their cryptocurrencies to company-operated validator
nodes for a growing number of supported blockchains. As a
non-custodial validator operator, BTCS will receive a percentage of
token holders staking rewards generated as a validator node fee,
creating the potential opportunity for a highly scalable business
with limited additional costs. For more information visit:
www.btcs.com.
Investor Relations:
ir@btcs.com
Public Relations:Mercy
Chikoworem.chikowore@btcs.com
BTCS (NASDAQ:BTCS)
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