Brian Armstrong, the CEO of the well-known cryptocurrency exchange site Coinbase, is rumored to have intensified his verbal battle with the US Securities and Exchange Commission. In which the aforementioned CEO asserted that rumors about the security agency’s purported plans to “get rid of” retail investors’ crypto staking allegedly reached him.
The CEO tweeted earlier this week that he hoped the report was untrue since it would purportedly be a “bad road” for the nation if it actually did happen. The process of staking, he continued, is “a pretty important invention.”
However, the security organization SEC has not yet commented on the tweets of the CEO of Coinbase. The security organization has continued to stress that most digital tokens, if not all of them, are securities and should be governed by its regulations. In which Armstrong contended that staking is not a security, and in which Chair Gary Gensler is remembered for classifying staking under the regulatory authority.
Coinbase’s Staking Program
The method of earning rewards by locking up money to help arrange transactions on various blockchains, such as Ethereum, is known as staking. Many cryptocurrency exchange companies, including Coinbase and Kraken, have already entered the staking product market, considerably aiding those platforms in diversifying their revenue streams.
The aforementioned sites, notably Coinbase, allow their users to stake cryptocurrencies without the requirement for specialized computer hardware or a minimum of 32 ether. Additionally, the network would not deduct any fees from user payouts; according to reports, staking on Ethereum can produce yields of roughly 6%.
According to data from Etherscan, Coinbase is the second-largest depositor of staked ether. In the second quarter of 2022, Coinbase stated that the SEC is investigating them, with their staking programs serving as the primary justification. That’s what prompted Armstrong to argue with the SEC in the past.
The aforementioned initial “discussion” between Armstrong and the SEC relates to a cryptocurrency lending product that the platform was forced to abandon as a result of SEC pressure. News reports from previous months have already indicated that staking services have become more popular since Ethereum formally adopted the so-called proof-of-stake method of arranging blockchain transactions in September of last year.
