oinbase">Coinbase, the major US cryptocurrency exchange based in San Francisco, stated that Americans nationwide should have equal access to the economic opportunities provided by new technologies like crypto staking. As such, oinbase">Coinbase plans to legally contest recent actions by regulators in certain states aiming to restrict staking services.
However, while legal proceedings are pending, oinbase">Coinbase customers in California, New Jersey, South Carolina, and Wisconsin will be unable to stake any additional crypto assets through the platform. Any assets staked prior to the states’ orders will remain unaffected.
This development follows recent allegations by the US Securities and Exchange Commission that oinbase">Coinbase was illegally operating as an unregistered exchange and broker while also offering unregistered securities through its staking program.
For now, oinbase">Coinbase has complied with halting new staking sign-ups in the states targeted by regulators. But the company maintains that appropriately regulated crypto staking should be available to all US consumers. It plans to legally defend staking access in court as the clash between crypto innovation and government oversight continues.
Soon after the SEC’s lawsuit, a group of states including California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, Wisconsin, and Alabama filed separate charges against oinbase">Coinbase for allegedly violating securities laws through its staking services.
Staking involves cryptocurrency holders pledging their assets to help operate a blockchain network, such as Ethereum’s proof-of-stake model. By locking up cryptocurrencies like ETH, stakers send their assets to a designated address and can earn rewards for securing the network.
However, the legality of crypto staking has been controversial. In February, the SEC imposed a $30 million penalty on the Kraken exchange for purportedly offering unregistered securities through its own staking program.
The recent state-level actions against oinbase">Coinbase echo the SEC’s view that certain staking programs may represent unregistered securities offerings. This regulatory dispute will likely play out through pending court cases as oinbase">Coinbase fights to defend the availability of staking for US crypto investors.
