- Coinbase CEO says Enforcement-based regulation doesn’t work.
- SEC remaining silent for Brian Armstrong’s Tweets.
Crypto exchange Coinbase CEO Brian Armstrong was alarmed about the rumors he received that the U.S. Securities and Exchange Commission (SEC) wants to “get rid of individual investors” from staking cryptocurrency.
According to a February 9th tweet from Coinbase’s Chief Executive officer, the U.S SEC intends to ban retail investors from participating in staking crypto, the revenue-generating strategy at the base of operating blockchains, such as Ethereum. And, he highlighted FTX and said Enforcement-based regulation encourages companies to run operations overseas.
Also, Brian Armstrong stated that;
Staking is a really important innovation in crypto. It allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.
SEC Maintains Silent
Armstrong’s tweet may be surprised many in the cryptocurrency industry. Also, previously, the SEC chair Gary Gensler, suggested that staking may fall under the regulator’s authority. Despite the fact that the Commodity Futures Trading Commission (CFTC), has classified Ether as a commodity.
According to the regulators, the majority of digital tokens are securities. And that should be regulated by its guidelines. However, the “U.S. SEC chose not to respond to any of Armstrong’s tweets”.
Staking entails receiving rewards in exchange for holding coins to maintain transaction orders on various blockchains. As the crypto exchanges like Coinbase, Kraken, and others have entered the staking market to expand their revenue streams. According to Etherscan, the exchange Coinbase is the second-largest depositor of staked Ether.
Further, the companies allow users to stake cryptocurrency and receive significant returns without specialized computers or equipment or a minimum of 32 Ether requirement. Moreover, in August 2022, SEC was investigating Coinbase staking operations.
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