Based mostly on the responses from Armstrong and different crypto executives and decision-makers concerning rules, it’s clear a lot of them don’t appear to grasp that they’re offering regulated providers in a non-compliant method. Within the particular case to which Armstrong reacted earlier than the details have been in, the SEC charged Kraken as a result of it was paying curiosity on deposit accounts. That could be a regulated exercise that the SEC offers sure exemptions for, e.g., banks don’t should register with the fee to pay curiosity on a financial savings account; it’s definitely not the case that crypto corporations are exempted from registering for paying curiosity to depositors simply because the deposits are in crypto, as Brian Armstrong appears to imagine.