Coinbase CEO Confirms SEC Crypto Staking Ban Reports

Ethereum, the 2nd-largest Crypto stake in the US, might be negatively impacted if the Securities and Exchange Commission (SEC) decides to crack down on “staking,” as the CEO of Coinbase has warned. In a set of tweets, he accused the SEC of stifling creativity and slowing the growth of the Cryptocurrency industry in the United States. As reported by the SEC, ordinary investors in the United States may be discouraged from participating in Cryptocurrency staking, according to a tweet from Coinbase co-founder and CEO Brian Armstrong on February 8, 2023.

Also Read: 10 Rallying Cryptos Might See Massive Profits In Q1 Of 2023

What is a Coinbase?

Coinbase is a popular Crypto exchange that facilitates these transactions with ease. Coinbase considers purchasing Bitcoin as simple as purchasing shares via an online stockbroker, but users should be wary of the service’s charges as well as abysmal customer support. Coinbase’s primary portal as well as smartphone application make buying, selling, as well as exchanging Cryptocurrency simple and fast. Today, Coinbase offers support for trading in over 200 different currencies, and that figure continues to rise on a regular basis. With Coinbase Earn, you may obtain a little bit of a new currency or earn interest on your qualified amounts. Not all investors should put their money into Cryptocurrency because of its high risk as well as volatility. But for those curious in Cryptocurrencies, Coinbase is a great choice for both novices and experts.

Also Read: MetaMask Combines Lido And Rocket Pool For Liquid Staking

Armstrong Worries About Staking

As reported by Brian Armstrong, the United States SEC is allegedly looking to outlaw staking for ordinary investors in Cryptocurrencies. On Twitter, Armstrong voiced his opinion that the nation’s leading securities authority shouldn’t prohibit staking Cryptocurrencies. Armstrong emphasized that staking isn’t a security when he shared a “primer” on the topic created by Paradigm. The concept of staking represents a major technological advancement for the Cryptocurrency industry. It paves the way for consumers to take an active role in maintaining public Cryptocurrency networks. Staking enhances the area in numerous positive ways, such as making it more scalable, more secure, as well as less wasteful of resources.

Brian also referred to an argument that surfaced when Ethereum shifted to a staking system a year ago. Among the arguments against regulation at the time was that staking did not meet the criteria for investment treaties to come within the jurisdiction of securities legislation, namely that it included a joint venture or the aim to profit totally from the effort of others. But Armstrong steadfastly refused to reveal where the allegations originated.

Continuity of Arguments

Armstrong claimed that the United States should encourage rather than discourage innovation in technology and that the country needs strict regulations for the monetary services as well as Web3 sectors to protect its nationwide safety. Regulating by use of punishment is ineffective. Like what occurred with FTX, it promotes businesses to set up shop in other countries. Armstrong didn’t have universal support; some critics were eager to point out the flaws in his proposal for decentralized, staked money. It’s similar to Decentralized Finance, except that staking is really not decentralized. A photo was shared on social media with the caption, “Guess it’s time for greater protection,” a jab at SEC Chairman Gary Gensler. Due to the expansive nature of the Howey test, in practice, almost anything may be considered a security. The true test will be whether or if the SEC believes this could control the entity. Armstrong believes the sector should collaborate to develop transparent standards as well as reasonable remedies that safeguard customers without compromising technology or nationwide safety.

Stats of Coinbase

It would be bad for Coinbase and Ether. If Coinbase were to lose this source of money, it would remove what looks to be a development generator for the company. The overall staked value in Quarter 4 of 2022 was more than $40 billion, thanks to annualized staking incentives of $3 billion. In reality, in 2017, blockchain incentives accounted for almost 10% of Coinbase’s total income. Only two months into 2023, Coinbase has already been punished in the Netherlands and was forced to halt business in Japan. Worse than that, the very initial instance of insider trading using Cryptocurrencies has just resulted in a guilty plea from a former director at Coinbase.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.