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United States-based cryptocurrency exchange Coinbase has announced that it will temporarily block customers from staking excess assets in four states amid legal proceedings from local regulators.
In a July 14 blog post, Coinbase Said Users in California, New Jersey, South Carolina and Wisconsin will be prohibited from using certain staking services until further notice. After the US Securities and Exchange Commission filed a lawsuit against the crypto exchange in June for offering unregistered securities, regulatory bodies in 10 US states began their own legal proceedings, causing some services to be suspended.
Coinbase said, “We strongly disagree with any allegation that our staking services are securities.” “But we will fully comply with initial state orders where necessary, even if it comes before we have had an opportunity to defend ourselves.”
According to Coinbase, only California, New Jersey, South Carolina, and Wisconsin have required regulatory actions to stake additional assets. Users located in Alabama, Illinois, Kentucky, Maryland, Vermont and Washington are “eligible to stake crypto as before”.
1/ As you may have heard, on June 6th 10 US states initiated proceedings related to Coinbase’s retail stake services. Let’s find out what this means for our customers. pic.twitter.com/pQidr0Ijc9
— Coinbase ️ (@coinbase) 14 July 2023
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The announcement comes after the first pre-motion hearing in the SEC’s case against Coinbase. The commission filed the lawsuit on June 6 and alleged that the crypto exchange has been operating as an unregistered security broker since 2019. Coinbase has largely denied all the allegations.
State and federal regulators have gone after other crypto firms for stakes, claiming the services violated securities laws. In February, Kraken settled with the SEC for $30 million, requiring it to stop offering staking services or programs to US customers.
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