Despite the SEC looking to crack down on supposed unregistered securities offerings via staking rewards programs, Coinbase has outlined that its services will continue. 5035 Total views 46 Total shares Listen to article 0:00 News Own this piece of history
Collect this article as an NFT Despite the recent crackdown by the United States Securities and Exchange Commission (SEC) on staking services offered by centralized providers, Coinbase has reiterated to customers that its staking services will continue and may actually increase.
In a new customer email, highlighted by a popular trader, AltcoinPsycho, via Twitter on March 10, Coinbase outlined its updated staking terms and conditions starting from March 29.
New email from Coinbase regarding staking:
“Your staked assets will continue earning rewards, no action is required… You earn rewards from the protocol, not Coinbase”
Coinbase basically telling the SEC to take a hike? pic.twitter.com/ckAAaZXsQb Psycho (@AltcoinPsycho) March 10, 2023
Under the fresh terms, Coinbase explicitly explains that users earn rewards from the decentralized protocols, not directly from the exchange itself.
Coinbase acts only as a service provider connecting you, the validators and the protocol, as opposed to offering a share of its own staking rewards, the email reads, adding that: Your staked assets will continue earning rewards. If you want to continue staking, no action is required. Your staking rewards may actually increase.
While the notion of Coinbases staking rewards continuing and potentially increasing may irk the SEC, the clear distinction around protocol rewards and service provision looks to avoid any gray area issues, like those recently faced by competing exchange Kraken.
As Cointelegraph reported, Kraken agreed to pay a $30 million settlement on Feb. 9 for allegedly failing to register its staking-as-a-service program with the SEC. As part of the deal, Kraken can no longer offer staking services in the United States.
Related: Coinbase CEO reiterates that staking products arent securities
An important aspect of the SECs complaint was that users lost control of their tokens when using Krakens staking program. Investors were offered outsized returns untethered to any economic realities, with Kraken also able to pay no returns at all.
Coinbase has argued that its staking services are fundamentally different from Krakens. CEO Brian Armstrong stated on Feb. 10 that the firm would happily defend its position in court if needed. #Coinbase #Business #SEC #Brian Armstrong
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