Coinbase Stands Firm: Staking Services Will Continue Despite SEC Scrutiny
Despite the Securities and Exchange Commission’s stance on staking, Coinbase, a popular cryptocurrency exchange, has assured its customers of continued service on its platform. In an email, the exchange promised that stake amounts would continue to earn rewards.
The SEC has recently stepped up its action against crypto firms, alleging that digital assets are securities. It also restricted the staking services of the Kraken cryptocurrency exchange because the firm did not register the program before offering it. Notably, the commission focuses on betting services offered by centralized exchanges.
Updates to Coinbase Staking Services
Coinbase has sent an email to its staking service customers that the service may increase. Participant who received the email shared information on Twitter. According to @AltcoinPsycho, the exchange has revealed that it is updating its staking terms and the changes will come into effect on March 29th.
A notable update to the terms, which should come into effect from March 29, is that staking rewards will come from Coinbase’s decentralized protocols and not from the exchange. He clarified his position as a service provider connecting clients, validators and staking pools.
Many customers may wonder if the decision to continue staking will make a difference. But the exchange has made several statements to clarify its position, saying that it does not directly reward stakers and only serves as a bridge between stakers, staking pools and validators.
So, even though the SEC is annoyed with the service, there will be no reason to attack Coinbase like Kraken did. Also, be reminded that Coinbase And him CEO Brian Armstrong shared posts announcing the differences between his staking services and Kraken.
Brief information on Kraken’s clash with the SEC
Kraken, a staunch competitor to Coinbase, has lost the right to offer staking services to US customers after it was heavily banned by the SEC. In a Feb. 9 SEC filing, Kraken has been offering staking services to U.S. customers since 2019.
The service was touted as an easy-to-use platform where investors benefit from Kraken’s efforts. The exchange also promised that stakers would earn 21% as their annual staking reward.
But according to the SEC, many users of the staking service have lost control of their tokens by staking, which brings them more risk and weak protection.
Today, we accused Kraken of failing to register the offer and sale of their Crypto Asset Staking as a Service program, whereby investors commit Kraken crypto assets for staking in exchange for an advertised annual investment return of up to 21%.
— US Securities and Exchange Commission (@SECGov) February 9, 2023
SEC shared announcement the press release claims that Kraken has not registered the offer and sale. It also stated that Kraken offered a huge reward that was not tied to economic realities, and even retained the right not to pay stakers any reward.
After much thought, Kraken agrees to settle with SEC and pay $30 million in fines for non-payment of the debt, prejudgmental interest, and civil penalties. It also agreed to stop offering staking services to its US customers. But in Blog PostKraken has announced that it will continue to offer the service to customers outside the US.
Featured image from Bankrate and chart from Tradingview.com
Credit : www.newsbtc.com