Coinbase CEO Tweets Rumors Of Retail Staking Ban, Kraken Faces SEC Probe
Coinbase (COIN) CEO Brian Armstrong tweeted about rumors that the Securities and Exchange Commission (SEC) may ban crypto staking for retail customers as regulators reportedly probe crypto exchange Kraken for selling unregistered securities, signs that increased regulatory scrutiny for cryptocurrencies may be in the cards.
Armstrong tweeted Wednesday about rumors that the SEC “would like to get rid of crypto staking in the U.S. for retail customers.” He said that staking is important for the crypto market and brings improvements such as “scalability, increased security, and reduced carbon footprints.”He also says that staking is not a security.
A related but separate Bloomberg report said that the SEC was investigating crypto-exchange Kraken for the sale of unregistered securities.The report does not reveal which Kraken tokens were the subject of the probe but it is important to note that Kraken also allows investors to stake their crypto and earn rewards.
Armstrong argues that rules must not stifle new technologies. His belief is that regulation by enforcement doesn’t work and that it would lead to companies operating offshore — as in the case of FTX.
In August 2022, Coinbase revealed in its quarterly filings that it had received «investigative subpoenas» and requests for documents from the SEC regarding its staking program.
It is also not the first time Armstrong has taken to Twitter to criticize the securities regulator. In September 2021, Armstrong tweeted about SEC's «sketchy behavior,» saying the regulator clamped down on a yield-earning product that Coinbase was about to launch when the company reached out to the SEC with a «friendly heads up and briefing.»
Several notable members in the crypto space have
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