Coinbase Halts Staking Services in Four US States
- Coinbase has temporarily halted staking services in California, New Jersey, South Carolina, and Wisconsin.
- Customers in these states cannot stake additional tokens, but their existing staked tokens are safe.
- Regulators in ten other states have initiated proceedings related to the exchange’s retail staking services.
- Despite actions pending in Maryland, Vermont, Kentucky, Illinois, Alabama, and Washington, staking service is live.
The largest crypto exchange in the United States, Coinbase, has confirmed that it has temporarily shut down its staking services in four states of the United States as a result of legal proceedings from local regulators. Staking, i.e., the process by which crypto holders lock their tokens to receive year-end gains, has been in the regulatory crosshairs around the globe.
According to the official announcement from Coinbase, the regulators in California, New Jersey, South Carolina, and Wisconsin want the exchange to offer its staking services to retail investors in these states. Interestingly, on the very same day, regulators in ten other states initiated their own proceedings related to the company’s retail staking services.
“Nothing about Coinbase’s staking services is an investment at all. Rather, staking is a core part of ensuring that the cryptoeconomy functions for hundreds of millions of users around the globe. Staking services are just one part of Coinbase’s existing business. But because staking is so fundamental to the crypto industry, Coinbase is committed to protecting access to staking for everyone,” said the exchange.
The users of Coinbase in California, New Jersey, South Carolina, and Wisconsin will be unable to stake “additional” tokens until the legal actions are pending. However, the amount staked prior to the regulatory involvement remains unharmed. Meanwhile, actions are pending in Maryland, Vermont, Kentucky, Illinois, Alabama, and Washington, but users can stake their tokens as usual.
Coinbase said that the “easier path” would be to “simply cut off staking services in the ten states that have initiated proceedings against” the crypto exchange, while adding that abandoning crypto staking would be wrong for the future of the crypto space and the future of its customers.
This announcement comes at a time when the biggest competitor to Coinbase, Binance, has laid off 1,000 employees. Changpeng Zhao’s exchange, which boasted an employee count of 8,000, might see more than a third of its workforce reduced as a result of the ongoing exercise.
“We are being led down a path of regulation-by-enforcement, which limits American participation in the future of staking, stunts American entrepreneurship and innovation in crypto technology, and cuts out a new and meaningful source of income for regular Americans,” said the exchange.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
