- Coinbase is required to halt the staking service after the regulatory action.
- Certain services were suspended as a result of legal action.
Coinbase, the United States-based cryptocurrency exchange, has announced that it will halt the staking service in four states in the United States. Coinbase, one of the largest and most prominent cryptocurrency exchanges, made this decision to comply with the legal requirements imposed by the regulatory authorities in those states.
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
On July 14, Coinbase released a blog announcing that users in California, New Jersey, South Carolina, and Wisconsin won’t be able to use some staking services until further notice. The temporary halt on asset staking comes after the regularity issues faced by the crypto exchange.
According to the report, the crypto exchange required to halt the staking service after the regulatory action only in California, New Jersey, South Carolina, and Wisconsin. However, users based in other states, like Alabama, Illinois, Kentucky, Maryland, Vermont, and Washington, allowed to stake cryptocurrencies as normal.
Coinbase Disagrees with the SEC’s Allegations
The U.S. Securities and Exchange Commission filed a lawsuit against the crypto exchange Coinbase in June, alleging that it has offered unregistered securities. Following that, Certain services suspended as a result of legal actions taken by regulatory organizations in ten US states.
Coinbase mentioned that it strongly disagreed with the SEC’s allegation that its staking services are securities. The crypto exchange has spent the last several weeks in active discussions with these state agencies. However, California, New Jersey, South Carolina, and Wisconsin are requiring changes to their services before those state proceedings are complete. That means there will be a temporary impact on customers in the specific states.
Recently, the U.S. SEC made its first appearance in court as part of its legal action against the cryptocurrency exchange. According to the SEC, 13 different cryptocurrencies listed on the exchange that meet the requirements of the Howey Test. However, Coinbase has been strong and proactive in its legal defense.
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