Hey there, folks! Big news from the world of cryptocurrency today! Coinbase, the U.S.-based crypto exchange, is hitting the pause button on staking services in four states. Why, you ask? Well, it seems the local regulators have thrown a wrench into the works.
In an announcement made on July 14, Coinbase informed its users in California, New Jersey, South Carolina, and Wisconsin that they won’t be able to stake additional assets for the time being. The reason? Legal proceedings initiated by those state regulators. It’s a temporary setback, but hey, sometimes you gotta roll with the punches, right?
This all started when the U.S. Securities and Exchange Commission (SEC) decided to file a lawsuit against Coinbase last month, claiming they were offering unregistered securities. Well, you can imagine what happened next. Ten states decided to follow suit and launch their own legal proceedings, which forced Coinbase to put some services on hold.
Now, Coinbase is clear about one thing: They don’t agree with these allegations. They firmly believe that their staking services are not securities. But guess what? They’re playing it safe and complying with the preliminary state orders. They’re willing to hit the brakes before they even get a chance to defend themselves properly. Talk about taking one for the team!
1/ As you might have heard, on June 6, 10 US states initiated proceedings related to Coinbase’s retail staking services. Let’s dig into what this means for our customers. pic.twitter.com/pQidr0Ijc9— Coinbase 🛡️ (@coinbase) July 14, 2023
Hold your horses, though! This pause in staking services only affects users in California, New Jersey, South Carolina, and Wisconsin. If you’re in Alabama, Illinois, Kentucky, Maryland, Vermont, or Washington, you’re in luck! You can still stake crypto just like you did before. Ain’t that a relief?
This announcement came right after the SEC and Coinbase had their first pre-motion hearing. The commission filed the lawsuit on June 6, alleging that Coinbase has been operating as an unregistered security broker since 2019. Of course, Coinbase has been quick to deny these allegations left, right, and center.
But here’s the thing, folks: Coinbase isn’t the only crypto company in hot water over staking. State and federal regulators have been going after others, claiming that staking services violate securities laws. Take Kraken, for example. They reached a $30-million settlement with the SEC earlier this year, and as part of that deal, they had to stop offering staking services to their U.S. clients. Ouch!
Well, there you have it, folks! The world of crypto is always full of surprises. Coinbase is putting a temporary halt on staking services in a few states, trying to play it safe amidst all these legal battles. But don’t worry, if you’re not in one of those states, you can still stake your crypto and ride the wave. Stay tuned for more updates from the wild and wonderful world of cryptocurrencies!