Coinbase Takes a Hit with Crypto Staking and Regulation Hurdles
News from Coinbase: The recent actions of the US Securities and Exchange Commission (SEC), on various players in crypto industry could have a long-term impact on giants such as Coinbase. If the regulatory action drags out, Kraken’s staking program will be restricted by the SEC. This could impact Coinbase’s revenue streams. Or did the SEC want to warn crypto companies? Gary Gensler, chair of the SEC, stated that the only way for crypto businesses to survive is if all guidelines are followed.
Learn More: Gary Gensler, US SEC: This is the Only Way Crypto Companies Can Survive
Binance, another crypto exchange, is facing its own set of problems as it struggles for a banking partner that will support its US Dollar transactions. Binance is currently suspending withdrawals and transactions in US Dollar.
Coinbase will report earnings for the quarter ended December 2022 on Tuesday 21 February 2023. The quarter was marred in part by the FTX crash that caused the market to crash. This led to a huge drop in trades on all exchanges, including Coinbase. Coinbase’s earnings depend largely on user trading. However, the recent crypto winter has impacted its revenues. Therefore, exchanges tend to focus on other revenue streams such as crypto staking. If regulatory concerns are worsened, this could lead to Coinbase losing some of its revenues.
Coinbase charges a commission based upon user rewards for staking. Cardano (ADA), Solana (SOL), and Ethereum (ETH) are charged 35% and 25% respectively. Coinbase has made $178.9million from staking, custody and interest income businesses in the last quarter. The SEC’s new rules will make it more difficult for businesses that provide assets to fund managers, in addition to the staking woes.
Also read: Solana Mobile Saga to Launch Next Week
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