Coinbase CEO Says SEC Might Ban Crypto Staking
The U.S. Securities and Exchange Commission is currently considering banning cryptocurrency staking. Brian Armstrong, Coinbase CEO, shared the same information on his Twitter thread.
He stated that he had heard rumors that the securities regulator was planning to ban all crypto staking by retail investors. Armstrong added, “I hope that’s false as it would be a terrible thing for the U.S. to allow that to happen.”
Although the U.S. SEC has not yet commented on the rumors however, it has repeatedly stated that most digital assets are securities and should be subject its rules. Gary Gensler, the Chair of the SEC, had previously indicated that staking might fall under its jurisdiction.
Crypto staking is the process of locking up coins to help verify transactions on different blockchains such as Ethereum. To increase their revenues, crypto exchanges such as Kraken and Coinbase have also offered staking products.
These staking services are available to retail investors without the need for special hardware. The minimum staking amount for the Ethereum blockchain is 32 ETH. It offers a yield of approximately 6%.
Coinbase vs SEC
In August 2022, cryptocurrency exchange Coinbase said that they were being investigated by the SEC for offering staking service on the platform. The US-based exchange is currently the second-largest Ethereum depositor. The Coinbase CEO wrote in a recent thread:
Staking is an important innovation in crypto. It allows users to take part in the operation of open crypto networks. The space is able to benefit from stakes, which bring many positive changes, such as increased security and scalability.
Coinbase had previously fought the SEC. Due to pressure from the Securities Agency, the crypto exchange had to end its crypto lending product.
Staking services are highly in demand right now, after Ethereum switched to the Proof-of-Stake protocol last September. ETH holders will soon be able to withdraw their staked coins, with the Shanghai hardfork set for March 2022.
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