- Coinbase has drawn a “battle line” against SEC regarding crypto staking, according to a crypto lawyer.
- CEO Brian Armstrong is also anticipating SEC’s attack on all US-based staking retail.
- Coinbase claims that staking does not qualify as a security under relevant US law.
The US Securities and Exchange Commission (SEC) may target Coinbase’s staking program next following Kraken’s $30 million settlement. However, Coinbase may be a tougher nut to crack, as it appears the top 2 exchange is not planning to back down on a legal showdown.
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Coinbase posted a blog on its official media platform citing why its staking services do not qualify as securities. Crypto lawyer Jeremy Hogan of Hogan & Hogan interpreted the post as “a battle line” that has been drawn.
An SEC lawsuit may not come as a shock to Coinbase. In fact, CNL reported earlier that Coinbase CEO Brian Armstrong is anticipating an SEC attack on all staking retails based in the US.
According to Coinbase’s blog, staking in itself is not a security under US law. The blog read:
“Staking is not a security under the US Securities Act, nor under the Howey test. Trying to superimpose securities law onto a process like staking doesn’t help consumers at all and instead imposes unnecessarily aggressive mandates that will prevent US consumers from accessing basic crypto services and push users to offshore, unregulated platforms.”
Staking is a popular earning strategy of crypto exchanges — both centralized and decentralized. Basically, exchanges offer a program where customers will store their tokens and enable the exchange to manage their assets and provide updated software.
In return, the exchange gets a percentage from the staking reward while the customer does not worry about the staking process nor the upkeep of his staking system.
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