Charles Hoskinson, the founder of Cardano (ADA), has offered a concept that could comply with legal requirements as the cryptocurrency industry adjusts to the increased regulatory scrutiny around staking operations.
During a webinar on February 10, Hoskinson suggested that operators in the industry take into account the contingent staking model, which is based on know-your-customer procedures.
Hoskinson pointed out that the transaction certificate would be two-sided under the concept, requiring both the delegate and the staking pool operator to sign the transaction before it is carried out. Notably, under the present staking architecture, a person must send a transaction to the pool in order to transfer their stake to the pool.
Nevertheless, dependent staking involves a separate procedure because the transaction would not be final until it had received the approval of the pool managers and the delegate. This line would give pool operators the chance to approve the delegation before it happens.
Furthermore, according to Hoskinson, contingent staking would provide pool operators the freedom to pick who they wish to delegate to, which may make it easier for them to meet legal requirements.
His remarks follow a settlement with cryptocurrency exchange Kraken over the platform’s staking activities by US regulator Securities Exchange Commission (SEC).
In fact, the SEC has come under fire for its most recent instruction from the crypto community, who claim the organization is trying to hinder the expansion of the industry.