Coinbase to keep cornerstone staking service after CEO Armstrong fires shots at the SEC

Coinbase Exchange has committed to maintaining its cornerstone cryptocurrency staking services after CEO Brian Armstrong countered the US Securities and Exchange Commission (SEC), demanding regulatory clarity. Notably, this is not the first time the US-based company has sought clarity on which digital assets pass as securities, making the latest altercation another jab at a relationship marred by contention and frustration.

Also Read: Coinbase finds support from Third Circuit court against SEC as its stock COIN falls by 18%

Coinbase will not ditch pillar Staking Service

Coinbase CEO, Brian Armstrong, has articulated the exchange’s plans to keep its crypto-staking services that forms one of the company’s business pillars. The staking service is a feature that allows customers to earn rewards by committing some of their crypto holdings to the platform.

The news follows a fierce attack by the crypto-prenuer against the US SEC, calling for regulatory clarity in the crypto arena.

Based on his assertions, the Coinbase executive has acknowledged the regulator’s charge against his company, describing it as an opportunity to “establish much-needed clarity around crypto rules and regulations.”

Notably, as the subject of the lawsuit, Coinbase represents the entire crypto industry in a case that will determine crypto rules and clarity moving forward. The case’s outcome will therefore have a bearing on the industry’s future. The situation culminated in a ten-state coalition spearhead by the Alabama Securities Commission, which also took aim at the exchange, issuing a “Show Cause” notice to Coinbase. 

A show cause notice signals the intention by a higher authority to take disciplinary action if suitable reasons are not provided for the behaviour by the subject. 

The States include Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin. Additionally, the exchange is now at risk of receiving a cease-and-desist order for the sale of unregistered securities. Reportedly, the exchange has just under a month (28 days beginning June 6) to prove why a cease-and-desist order should not be issued.

Nevertheless, the CEO reminisced when the exchange went through a thorough evaluation process by the SEC in 2021 as part of the standard procedure before a company can go public. With this, Armstrong has identified a clear inconsistency between the SEC and the Commodity Futures Trading Commission (CFTC).

Also Read: CFTC warns of product range expansion risks as regulator clampdown on crypto intensifies

Coinbase CEO “We’re not going to wind down our staking service.”

Coinbase CEO has taken his stand for the company as the court case continues, calling it “business as usual” for the largest cryptocurrency exchange in the United States. It is worth mentioning that the staking service accounts for about 3% of Coinbase’s overall net revenue, and features among the many strategies to diversify the exchange’s largely trading fee-dependent revenue base.