Coinbase stops staking in four US jurisdictions following the authority's demands

By: Henry Felix

Coinbase stops staking in four US jurisdictions following the authority's demands

July 15, 2023 6:20 AM

In accordance with the actions of regulators in California, New Jersey, South Carolina, and Wisconsin, the US cryptocurrency exchange has temporarily ceased staking more assets.


Coinbase, a United States based cryptocurrency exchange, recently announced that it would temporarily ban users in four jurisdictions from staking further assets owing to legal actions brought by local regulators.


According to a blog post→ published on July 14, Coinbase clients in California, New Jersey, South Carolina, and Wisconsin would be restricted to use some staking services until further notice. Services were temporarily halted after the SEC filed suit in June accusing the cryptocurrency exchange of promoting unregistered securities. This prompted similar legal measures from regulatory bodies in ten U.S. states.


"We completely disagree regarding any claim that any of our staking products or services are securities," Coinbase stated. "However, even though we haven't had a chance to defend ourselves, we are going to comply with any preliminary state orders issued."

 

Related: Potential violations of securities law by Coinbase may warrant action from the SEC→


The pause on staking new assets, according to Coinbase, is only necessary owing to the operations of regulators in California, New Jersey, South Carolina, and Wisconsin. Alabama, Illinois, Kentucky, Maryland, Washington, and Vermont residents are "eligible to stake crypto just as they were before."

 


The announcement came following the first pre-motion hearing in the SEC's action against Coinbase. The commission filed the action on June 6, claiming that the crypto exchange has been operating as an unregistered security broker since 2019. Coinbase has largely disputed all of the claims.


Other crypto firms have been targeted for staking by state and federal regulators, who claim the services violate securities laws. In February, Kraken reached a $30 million settlement with the SEC, requiring it to cease providing staking products or services to US consumers.