Coinbase – one of the world’s largest digital currency exchanges – has ended its staking program in four states. At press time, California, Wisconsin, New Jersey, and South Carolina will no longer be privy to the trading platform’s earn program.
Coinbase Earn Program Ends in Various Regions
The move is a response to the present lawsuit the company is facing from the Securities and Exchange Commission (SEC). As it stands, the SEC made the claim that Coinbase has been operating as an unlicensed exchange broker the whole time, and thus the firm is not in compliance. It is thus subject to penalties and fees.
Coinbase has scowled at this, claiming that executives met with representatives of the SEC several times over the course of nine years to ensure the company was following all the present rules. While Coinbase itself ended the earn program for the above-listed states, ten other territories have opted out because of the ongoing suit, though those states have not been named at the time of writing.
In a statement, Coinbase has vowed to fight the charges against it. It said:
Staking is a core part of ensuring that the crypto economy functions for hundreds of millions of users around the globe. Staking services are just one part of Coinbase’s existing business, but because staking is so fundamental to the crypto industry, Coinbase is committed to protecting access to staking for everyone.
The situation has called staking in America into question. The SEC has filed suit against several other companies for offering staking services, a big one being Kraken. The company was forced to forfeit roughly $30 million in fees as part of a settlement. Also, all its staking services came to an end.
Discussing the circumstances surrounding liquid staking in the crypto arena, Boris Revsin – a managing partner at Tribe Capital – said:
As the on-chain user experience for liquid staking continues to improve, I see more and more cold storage and institutional ETH being staked [on] centralized exchanges, or at the [very] least, in a non-custodial way on those exchanges. Lido [a Tribe Capital portfolio position] is currently the frontrunner across all key metrics, and they are also the most capitalized. The argument that Lido is centralizing liquid staking by being the largest provider is missing the forest for the trees. It is simply a response to market dynamics which value security, governance, ease of use, and scale. I expect the entire market to grow, for Lido to retain the largest market share, and begin to roll out additional strategies and products in the months to come.
The SEC is a Bully
The SEC has also garnered a reputation for being a bully that has been pushing a “regulation through enforcement” agenda.
The agency has even filed suit against Binance, the world’s biggest crypto exchange.