Coinbase Faces Regulatory Crackdown
Coinbase says customers in California, New Jersey, South Carolina, and Wisconsin will no longer be able to stake digital tokens on its exchange.
The move comes after the Securities and Exchange Commission sued Coinbase last month, alleging that the company violated rules that require it to register as an exchange.
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Coinbase Faces Regulatory Crackdown!
Coinbase says customers in California, New Jersey, South Carolina and Wisconsin will no longer be able to stake digital tokens on its exchange via @FactSet #Coinbase #Crypto pic.twitter.com/40DT2EQ35j— The_Journalbiz (@the_journalbiz) July 17, 2023
The agency also labeled the Coinbase Earn staking program—which lets investors earn interest on their tokens—an unregistered security.
Regulators from 10 states also filed charges against Coinbase on the same day, stating that the company’s staking services are securities under state laws.
Coinbase said Friday that California, New Jersey, South Carolina and Wisconsin require changes to its staking services, and customers in those states won’t be able to stake additional assets before regulatory actions are resolved. Crypto that was staked before the orders aren’t affected, the company said.
“Nothing about Coinbase’s staking services is an investment at all,” the company said in a blog.
Coinbase’s revenue from blockchain rewards, which include staking, accounted for 10% of the company’s total net revenue in the first quarter.
Shares of Coinbase edged slightly higher in early Monday trading.
