The United States Securities and Exchange Commission and cryptocurrency exchange Kraken have reached an agreement that will result in Kraken no longer providing services or engagement programs to customers located in the United States.

The Securities and Exchange Commission (SEC) stated in a press release dated February 9 that it had filed charges against Kraken for “failing to register the offer and sale of its staking program as a crypto asset service.” According to the SEC, these programs qualify as securities and are under its jurisdiction. The cryptocurrency company reached an agreement in which it will pay $30 million in repayment, pre-judgment interest and civil penalties, and will also stop offering its engagement service to consumers in the United States.

“Kraken not only offered investors outsized returns untethered to any economic reality, but also retained the right not to pay them any returns,” said Gurbir Grewal, head of the SEC’s Division of Enforcement. “Kraken offered investors outsized returns untethered to any economic reality.” “During all this time, he gave them no idea of, among other things, his financial status or whether or not he had the means to pay the advertised returns in the first place.”

According to the complaint filed by the SEC, Kraken has been promoting its cryptocurrency staking services as an “easy-to-use platform and advantages arising from Kraken’s efforts on behalf of investors” since 2019, when it began selling such services to consumers in the United States. However, according to the commission’s allegations, Kraken customers essentially lost ownership of their tokens when they offered them to the staking program. This exposed them to more risk and provided “very little security” for their investments.

In a blog post dated February 9, Kraken said that it will continue to provide engagement services for clients located outside of the United States through a different business.

After Internal Revenue Service authorities petitioned the US District Court for the Northern District of California to allow it to issue subpoenas to try to gather information about Kraken users, the Securities and Exchange Commission came to an agreement with the company and announced it. The document that was filed in court on February 3 states that Kraken did not respond to a similar summons that was served on it in May 2021.

In the lawsuit that took place in 2021, the cryptocurrency exchange was asked to submit information about individuals who had transacted $20,000 worth of digital currency over the course of a single year between 2016 and 2020. United States officials they said that Kraken “did not comply with the subpoena” and did not deliver the “books, documents, papers and other material” that were required of them.

(Updated 10:06pm Feb 9 UTC): A statement from Kraken was included in this post after it was updated to reflect the latest information.