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.