Coinbase Is Willing to Defend the Honor of Staking at All Costs
Coinbase is upping its game in the recent staking battle begun by the Securities and Exchange Commission (SEC). The popular digital trading platform is moving to the frontlines and has vowed to become the top soldier in the war against staking practices.
Coinbase Is Becoming a Staking Colonel
Not long ago, the SEC struck at Kraken, a popular crypto exchange based in Northern California. As part of a court settlement, the firm vowed to cease all its staking services. It will also pay a fee of more than $30 million to the agency. The move has had terrible consequences for the crypto space, as everyone is worried that this will turn into something much bigger and that the U.S. is now waging one of its biggest fights against crypto staking.
As a result, the price of bitcoin and many other leading digital assets have fallen at the time of this writing. However, some entities are not giving up without a fight, one of which is Coinbase. The trading company has insisted in recent blog and social media posts that staking services are not securities.
It also said that the offerings being provided by Kraken are more along the lines of yield products and are quite different when compared with the offerings of Coinbase. The company has said its customers are not likely to face any danger.
Brian Armstrong – the CEO of Coinbase – is willing to go even further when defending the honor of the staking industry, saying in a recent statement:
We will happily defend this in court if needed.
Staking is a process in which crypto holders have their assets locked up for set periods to help keep certain blockchain networks running appropriately. From there, they earn digital rewards on their assets so long as they don’t take them back.
Coinbase’s chief legal officer Paul Grewal has backed up the company’s statements that it’s not offering yield products. He mentioned:
Coinbase’s staking services are fundamentally different and are not securities… The purpose of securities law is to correct for imbalances in information, but there is no imbalance of information in staking, as all participants are connected on the blockchain and [can] validate transactions through a community of users with equal access to the same information.
He further mentioned that staking wasn’t an investment as anyone who takes part in the process isn’t giving something up for a separate item. He said:
They own exactly the same thing they did before… Rewards are simply payments for validation services provided to the blockchain, not a return on investment.
What’s the SEC’s Problem, Anyway?
In its fight against Kraken, the SEC claims to have taken issue with the idea that it didn’t warn users of any potential risks.
The company also advertised investment returns as high as 21 percent.
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