Coinbase CEO Brian Armstrong commented on rumors of a possible U.S. ban on staking for retail investors, calling it “a terrible path.”
1/ We’re hearing rumors that the SEC would like to get rid of crypto staking in the US for retail customers. I hope that’s not the case as I believe it would be a terrible path for the US if that was allowed to happen.
— Brian Armstrong (@brian_armstrong) February 8, 2023
“Staking is a really important innovation in the crypto industry. It enables users to directly participate in the operation of open crypto networks and brings many positive improvements to the space,” said Armstrong.
He emphasized that the coins involved in staking are not securities. In this regard, he separately mentioned Ethereum and referred to the opinion of Paradigm experts.
In September, after the transition of the second cryptocurrency by capitalization to the Proof-of-Stake (PoS) algorithm, the head SEC Gary Gensler allowed the recognition of such coins as securities.
Armstrong noted in the thread that the US needs clear rules to encourage financial Web3 innovation, and regulation through enforcement “doesn’t work.”
6/ Hopefully we can work together to publish clear rules for the industry, and come up with sensible solutions that protect consumers while preserving innovation and national security interests in the US
— Brian Armstrong (@brian_armstrong) February 8, 2023
“Hopefully, we can work together to issue clear rules for the industry and come up with smart solutions that protect consumers while preserving innovation and US national security interests,” the head of Coinbase concluded.
Cardano founder Charles Hoskinson, in a comment on Armstrong’s thread, called Ethereum’s staking mechanism “problematic.”
Ethereum staking is problematic. Temporarily giving up your assets to someone else to have them get a return looks a lot like regulated products. Slashing and bonds not so good. Non-custodial liquid staking on the other hand is like the mining pools we’ve used for 13 years
— Charles Hoskinson (@IOHK_Charles) February 9, 2023
“Temporarily transferring your assets to someone for profit is very similar to regulated products,” he wrote.
According to Hoskinson, mechanisms should be non-custodial and decentralized, as in the case of liquid staking.
“It’s sad that all PoS protocols can be lumped together due to a fundamental misunderstanding of the real facts of operation and design. It’s like equating Three Mile Island and a modern fourth-generation nuclear reactor, because both use fission,” Hoskinson concluded.
Well-known crypto commentator Andrew revealed that he believes regulators are forcing Coinbase to shut down staking-related products. His statement was denied by the company’s general counsel, Paul Grewal, calling it “completely false.”
Totally false. https://t.co/YDvarmDCo9
— paulgrewal.eth (@iampaulgrewal) February 9, 2023
Andrew responded by noting that the head of a large, publicly traded crypto company would not waste time “wandering aimlessly on Twitter.”
The CEO of a publicly traded and heavily regulated company doesn’t aimlessly wander on to twitter dot com and waste his breath…
— Andrew (@AP_Abacus) February 8, 2023
According to the results of the third quarter of 2022, staking generated $62.8 million in revenue for Coinbase, or ~11% of the total, the author of the db account noted.
Staking made up ~11% of Coinbase’s revenue in Q3 https://t.co/47wVVc7AFG pic.twitter.com/0sefBOhO2M
— db (@tier10k) February 8, 2023
At the time of writing, the corresponding service of the company allows you to receive passive income on five cryptocurrencies.
Recall that in August 2022, the exchange announced the launch of Ethereum liquid staking.
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