Coinbase CEO Reacts to Ban on Crypto Staking
Coinbase CEO Brian Armstrong has reacted to the proposed ban by the United States Securities and Exchange Commission (SEC) on crypto staking, stressing that such a decision will push more businesses offshore.
1/ We're hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that's not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.
— Brian Armstrong (@brian_armstrong) February 8, 2023
Armstrong emphasizes that staking is an important innovation in cryptocurrency because it enables users, especially retail customers to participate in running open crypto networks. The Feb. 9 statement was in reaction to the festering rumour about SEC.
Armstrong strongly argued that:
“I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.”
Meanwhile, Armstrong fails to provide the source of the rumour but maintains that such thought should not be allowed to see the light of day.
However, he further argued that new technologies should be encouraged to grow in the US rather than being stifled due to lack of clear-cut rules and regulations. He added that financial services and Web3 are issues of national security and should be treated as such.
In the same vein, Armstrong referred to an Oct. 5 blog post released by crypto investment firm Paradigm, which contended that Ethereum’s transition to proof-of-stake and its new model doesn’t render it as a security.
He also criticized the relevant authorities for lack of clarity in the U.S., stressing that such action is driving companies offshore including crypto exchanges like FTX.
More Reactions Trail SEC’s Rumour
Following the rumour making the round that SEC is planning to ban cryptocurrency, one of the leading industry commentators Adam Cochran argued that the SEC would likely descend on centralized parties offering staking, not PoS itself.
Timely reminder that https://t.co/splf30ft12 outlines the legal arguments of ETH staking under the Howey Test.
I believe the SEC would likely go after centralized parties offering staking, and not PoS itself as that'd be a harder fight that could crush them in precedent. https://t.co/YiD2Cpxx6z
— Adam Cochran (adamscochran.eth) (@adamscochran) February 8, 2023
In the same vein, counsel for Delphi Digital’s research and development arm, Gabriel Shapiro, remarked that there is a possibility that staking services offered by centralized exchanges like Coinbase fall under security.
one can argue staking ETH *THROUGH COINBASE* is a security issued by Coinbase without thinking/arguing all staking of ETH is a security or that ETH is a security
Ultimately the tech is meant for self-serve…let's see what actual position the SEC takes….
— _gabrielShapir0 (@lex_node) February 8, 2023
While the rumour is yet to be established, there is no mincing word that the coming days will be full of interesting development.