Ethereum staking company Kiln raises $17M
Kiln, whose tech underlies the ethereum staking services of companies including Coinbase, raised $17 million in funding led by 1kx.
Why it matters: Crypto staking itself remains in regulatory gray ground, with the U.S. Securities and Exchange Commission suing a number of exchanges over the product. SEC Chairman Gary Gensler has also suggested that he considers etheruem-like tokens to be securities.
What they're saying: Kiln provides pooled staking services with companies including Ledger Live, Crypto.com, Bitpanda and Coinbase.
- "There is no clear guidance right now on staking and DeFi by regulators in the world," says CEO Laszlo Szabo.
- "As long as you offer noncustodial staking, I hope any regulator in the world ... will tell you that you don't need to be regulated, because if you disappear, the end customer still has their funds and you avoid another FTX event," Szabo adds.
- Szabo notes that Swiss financial market regulator FINMA does not require noncustodial staking operators to get a banking or fintech license.
Flashback: Ethereum owners can "stake" their tokens to help verify transactions happening on the blockchain. In return, they could earn a yield.
- Another staking and infrastructure company, Figment, was last valued at $1.4 billion in 2021.
State of play: Kraken agreed to shutter its U.S. crypto staking program in February, paying a $30 million fine for failing to register with the SEC.
- Coinbase's staking program, too, has become one of the many battlegrounds in the commission's lawsuit against it. The exchange giant has fought against the SEC's critique of the product.
- Staking as a Service also was a sticking point for the SEC in its lawsuit against Binance.
Of note: Other investors include IOSG, Crypto.com, Wintermute Ventures, KXVC and LBank, taking Kiln's total amount raised to $37 million.