Recently an issue of SEC going after staking platforms such as Kraken, Coinbase, Binance, etc… came up. Kraken settled for $30 million and removed staking services and here is a quick explanation from SEC on what and why:
Please note that Gary Gensler specifically mentions targeting platforms that TAKE possession of tokens thus exposing investors to risks of that platform itself. Nothing to do with Cardano staking since you control your own coins when staking to a POOL (from your wallet, not from the exchange).
This topic expanded to potential of regulatory actions against ALL other staking and conversations (on social media) started about Cardano Stake Pools. Inevitably (I guess 
) this became a conversation about SPO and KYC and USA regulations. At which point Charles made a video where a term “Contingent Staking” came up. 
In this video, as you can see for yourself, Charles acknowledges that what just happened to Kraken is not applicable to Cardano and discusses potential directions that USA SPOs may have to take if regulation turns against them. Specifically how contingent staking can be used to stay compliant for USA or outside of USA SPOs.
This line of events eventual spread to Twitter (and other social media) and became a conversation about adding/ not adding contingent staking to L1 of Cardano, censorship, permission-less staking and so on.
NOW the topic touched L1 of Cardano, so things got emotional (as they always do when someone even looks at Cardano SL/CL 
). So, like a clockwork, the FUD and grandstanding with a good dose of personal attacks emerged. Full round of “Why are we even here” and “I can’t believe you all want…” as well as “I’m leaving / have solution/ had enough/ etc…” posts. While the other 95%+ of Cardano users just turn on their phones/computers and just see the middle of self inflicted shitstorm in progress.
So if you are asking yourself at this point “What exactly did SEC say that affects Cardano?” The answer is NOTHING.
SEC in their recent actions didn’t do or say anything that would impact on Cardano itself.
What did happen is that an open discussion has degenerated into a myopic belief that Cardano either needs or should never have L1 contingent staking. And, as usual, proponents for each side will engage in battle of wits over social media while Cardano community members will mostly feel like they have to choose and support one side or the other.
This just shows how many different Cardano leaders/voices on both sides of the argument can all end up in a same echo chamber with blinkers on.
Do you all really think that Cardano devs can just whip up a KYC protocol and SEC and other agencies will be like: “Oh, I guess Cardano is regulating itself, COOL 
, lets leave them alone.” 
Cardano can build the best KYC protocol ever and SEC can just not accept it as evidence of compliance. In a matter of fact, SEC can deem such protocol illegal because they ask for KYC with out being government compliant entities.
Imagine if you opened an unauthorized illegal resort with hotels, restaurants, casinos, entertainment and stores. BUT you made sure to have a KYC protocol to ensure no money laundering or ‘other’ illegal money transactions were being allowed through. Do you really think government agencies will be asking to see your KYC reports and treat you like any other business?
NO they wont. They’ll be like: “Hey! You have no permits for any of this. Shut it down!”
The fact that all these people within Cardano even think that governments will accept code-as-law instead of just ignoring it and pushing their own agendas is naive at best. We are NOT an equal partner at negotiating with any government agencies about regulation. Governments control all the power in such negotiations. And this doesn’t even account for other political agendas that may work against us in such matters.
As for “Contingent Staking” boogeymen… Did you know that ALL Cardano staking is currently “Contingent Staking”? Contingent means that A happens ONLY IF B happens as well. If you want to be able to delegate to any pool you MUST register your wallet and deposit 2 ADA as well as cover all transaction fees for this. That’s right! Your ability to delegate is CONTINGENT on you registering and having enough ADA to do it.
“But Neo you are taking it too literal, what they mean was changing the whole protocol to permission-ed…” I can already hear it now 
.
The point here is that the mental block of thinking that you have to ruin L1 to be compliant is myopic. All you would need to do is have a wallet that would add a government approved DID (if there is ever such a thing) in a contract and register as “approved” citizen for delegation. Then if there are any SPOs that want to give rewards to only “approved” citizens they run it as private pool at 100% fee and make a contract for distribution of rewards to only listed-as-approved wallets.
All this is possible right NOW with ZERO changes to protocol. There are pools that run on 100% fees and distribute rewards themselves. Also, there are projects that search delegated wallets and only send drops to wallets that meets some criteria.
Coding for SPOs approval of delegation is a metal block. It is most likely never going to be accept by governments or Cardano community.
Now for the most important part.
The only way Cardano becomes accepted and adapted by people and governments through out the world is by being stable and incorruptible trough time. People, leaders, groups, forums, influencers and emotions are all corruptible and can make mistakes. This is why it’s important to lay out founding principles and follow those priciples.
So if you want to help deal with this and other incoming shitstorms (self imposed or otherwise), then engage in discussion and creation of Cardano constitution. Cardano constitution will help lay down the guidelines that will clearly show the way out of these echo chambers. Something like this wouldn’t even be an argument if we had constitution that addressed L1 delegation permissibly, and so on.
It is only through strong foundations that we can persevere, not through social media bickering about any new term that one of our community leaders, influencers, members makes trendy.
We are Cardano.
If we persevere, then Cardano will persevere.
Despite of any governments, laws and press. Don’t let them scare you. Just fools yelling at a computer code thinking they can stop a revolution.
Always remember that we are here because we know how good everyone’s tomorrows can be.
The best blockchain with the best community
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