Coinbase Argues Its Staking Services Are Not Securities, Criticizes SEC Regulatory Approach
Coinbase, one of the largest cryptocurrency exchanges in the US, has stated that the staking services offered on its platform are not securities. The announcements following a $30 million settlement that Kraken, another U.S.-based crypto exchange, entered into with the U.S. Securities and Exchange Commission (SEC) also criticize the institution’s approach to the matter.
Coinbase Protects Its Staking as a Service Program
Coinbase, one of the leading cryptocurrency exchanges in the US, has published a blog post distinguishing its staking-as-a-service program from others in the market and clarifying that for an institution, this type of service is not a security. offer.
Blog mail Published on Feb. 10, Paul Grewal, General Counsel of the company, states how improper enforcement of this clause in the regulation could affect the entire crypto industry in the country. The article explains the company’s position on this issue:
Staking is not a security under either the US Securities Act or the Howey test. The attempt to impose securities law on a process such as staking does not help consumers at all, and instead imposes unnecessarily aggressive requirements that will prevent American consumers from accessing basic crypto services.
In addition, Greval also criticized how the U.S. Securities and Exchange Commission handles cryptocurrency regulation, explaining that enforcement regulation is a “poor substitute” for de facto rulemaking.
SEC Chairman Gary Gensler hints at more regulation
Coinbase’s stance seems to be in direct conflict with the position the US SEC has taken when it comes to centralized platforms offering cryptocurrency staking services. On Feb. 9, the institution completed a $30 million settlement with Kraken, another cryptocurrency exchange, for an unregistered sale and offer of these services to its customers.
Gary Gensler, chairman of the US Securities and Exchange Commission, hinted that other industry players are expecting more of this kind of action, saying that these companies should communicate to their customers about the risks associated with such activities. February 10, in an interview with CNBC’s Squawk Box, Gensler declared:
Other platforms should take note of this and try to ensure compliance, ensure proper disclosure, registration and the like.
Coinbase offers staking programs for various cryptocurrencies as part of its portfolio of services and charges a flat fee for using these services. In a recent report, JPMorgan predicted that new staking funds flowing into Ethereum following the upcoming Shanghai refresh are likely to go to decentralized platforms like Lido due to the various advantages they offer over centralized providers.
What do you think of Coinbase’s stance on staking as a service programs? Tell us in the comments section below.
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Credit : news.bitcoin.com