Even though the US Securities and Exchange Commission (SEC) has recently taken action against crypto exchanges offering staking services, US-based cryptocurrency exchange Coinbase has announced that its staking services will continue or it might even increase, media reports said.
The announcement came in a new customer email highlighting the updated terms & conditions coming into effect from March 29. Coinbase has clearly expressed that the users receive rewards from decentralized protocols, not directly from the interchange itself, acting as a service provider that connects users, validators, and more.
Kraken, a rival cryptocurrency exchange, agreed to a $30 million settlement with SEC on February 9 after being accused of offering unregistered securities in the form of staking services. The settlement also includes banning Kraken’s staking services in the US.
The SEC’s complaint alleged that Kraken’s program caused users to lose control over their tokens. Kraken reportedly offered investors “returns that were disproportionately high and not based on economic reality” and could even provide “no returns.” In contrast, Coinbase has contended that its all staking services are distinct from Kraken’s. Coinbase’s CEO, Brian Armstrong, has stated that the company would be willing to defend its stance in court “if necessary.”
While the SEC’s crackdown on centralized staking services has created uncertainties in the cryptocurrency market, Coinbase’s declaration of continuing and possibly increasing staking rewards may signal a new direction for the market. It is essential to note that Coinbase has distinguished protocol rewards in a clear manner and service provision, avoiding any gray area issues that Kraken faced.
The cryptocurrency market has witnessed many regulatory challenges, but the recent crackdown on staking services has caused unease among investors. However, Coinbase’s decision to continue and increase its staking rewards indicates that the company has confidence in its stance and is willing to defend itself in court.
Coinbase’s decision also boosts investor confidence in the market, indicating that there is still room for growth and innovation in the industry. The cryptocurrency market has been growing rapidly, with many traditional financial institutions exploring the potential of blockchain technology.
