Getting rid of crypto staking would be a ‘terrible path’ for the US — Coinbase CEO
Brian Armstrong, CEO and co-founder of cryptocurrency exchange Coinbase, believes that a ban on retail staking of cryptocurrencies in the US would be a “terrible” move by the country’s regulators.
Armstrong did comments on a Feb. 9 Twitter thread that has already been viewed more than 2.2 million times, after noting that they had heard “rumors” that the U.S. Securities and Exchange Commission “would like to get rid of cryptocurrencies.” rates” for retail customers.
“I hope it’s not, as I believe it would be a terrible path for the US if that were to happen.”
Armstrong did not say where the rumors originated, but noted that staking is “a really important innovation in cryptocurrency.”
“Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprint,” he added.
2/Staking is a really important innovation in cryptocurrency. This allows users to directly participate in open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprint.
— Brian Armstrong (@brian_armstrong) February 8, 2023
Armstrong also mentioned a blog post by crypto investment firm Paradigm dated Oct. 5 arguing that Ethereum’s move to proof of stake and its subsequent “staking” model does not make it a security.
The Paradigm announcement comes just weeks after SEC Chairman Gary Gensler suggested that proof-of-stake (PoS) cryptocurrencies could trigger securities laws. He made the announcement on September 15, speaking to reporters after a meeting of the Senate Banking Committee.
Armstrong also criticized the current lack of regulatory clarity in the US and the subsequent “coercive regulation” that he says is forcing companies like cryptocurrency exchange FTX to go offshore.
He has repeatedly called for regulation that sets clear rules for the industry while maintaining innovation.
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The top four staking cryptocurrencies by market capitalization account for over $55 billion in staking assets, according to Staking Rewards, suggesting that a nationwide ban would deal a huge blow to the country’s crypto industry, which has already experienced a massive exodus of businesses related to cryptography. .
Some industry observers have suggested that the SEC may be targeting centralized parties offering betting services rather than the technology itself, arguing that an agency attack on the latter would be a losing battle that would “crush them in precedent.”
A timely reminder that https://t.co/splf30ft12 lays out the legal case for staking ETH according to the Howey test.
I believe the SEC will likely go after centralized parties offering staking rather than PoS itself as it will be a more difficult fight that could overwhelm them in a precedent. https://t.co/YiD2Cpxx6z
— Adam Cochran (adamscochran.eth) (@adamscochran) February 8, 2023
Delphi Digital R&D General Counsel Gabriel Shapiro has suggested that there is a strong case that the staking services provided by centralized exchanges such as Coinbase constitute security, drawing parallels between them and other “Make Money” products.
While I personally believe that Earn Money programs offered by CEX are debt securities, I think it is *possible* to offer pure PoS as a service, even on CEX, without the offer being a security, depending on the details of the terms. . . But tbqh is a close case.
— _gabrielShapir0 (@lex_node) February 8, 2023
Coinbase is currently the subject of an ongoing SEC investigation, which Coinbase reported to the SEC on Aug. 9. registration was associated with staking rewards among other offers.
Credit : cointelegraph.com