Coinbase CEO: Bitcoin and Ethereum staking may be banned in the US

• Brian Armstrong said that if the SEC bans crypto betting, it would be a “terrible path” for the country.
• The Coinbase CEO said the SEC should refrain from “regulation by enforcement” and instead take a constructive approach to crypto regulation.

In an explosive revelation earlier today, Coinbase CEO Brian Armstrong stated that his company has heard rumors that the US Securities and Exchange Commission (SEC) wants to ban crypto betting for all retail investors in the US

Crypto exchange Coinbase offers its users staking facilities for some of the best cryptocurrencies such as Ethereum. They make crypto betting extremely easy so that retail players can also benefit from it. Crypto staking involves the process of earning rewards by unlocking coins that help facilitate transactions on various blockchain platforms such as Ethereum. As a result, crypto exchanges such as Coinbase and Kraken have started offering the staking feature to diversify their income.

This is not the first time the Coinbase CEO has lashed out at the securities regulator. In August 2022, Brian Armstrong warned that the exchange would shut down its Ethereum stake if threatened by regulators such as the SEC. In his latest tweet thread, the Coinbase CEO also noted that if the SEC goes ahead with banning crypto betting, it would be a “terrible path” for the US. He further added:

Staking is a very important innovation in crypto. It allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security and reduced carbon footprints.

1/ We hear rumors that the SEC wants to get rid of crypto betting in the US for retail customers. I hope that is not the case, as I think it would be a terrible path for the United States if it were allowed to happen.

— Brian Armstrong (@brian_armstrong) 8 February 2023

According to the data on Etherscan, Coinbase is currently the second largest depositor of stake Ether. For anyone to participate in Ethereum staking, they must deposit a total of 32 ETH and take a cut of the rewards. By staking their ETH, users can earn up to 6% return.

Coinbase vs SEC

Over the past year and so, crypto exchange Coinbase has locked horns with the US SEC over several issues. Due to pressure from the securities agency, Coinbase had to withdraw its crypto loan product.

Ever since the Ethereum blockchain switched to the Proof-of-Stake network last September 2022, the demand for staking services has been increasing. The rumor that the SEC may put an end to this has surely scared the crypto community. The Coinbase CEO added that regulation by enforcement is not the right approach. Rather, it will encourage companies to establish bases outside the United States. Brian Armstrong added:

We must ensure that new technologies are encouraged to grow in the United States, and not stifled by a lack of clear regulations. In the case of financial services and web3, it is a matter of national security that these capabilities are developed in the United States

The next phase of Ethereum development involves a Shanghai hard fork planned for March 2023. It is important from the point of view that it will allow ETH holders to withdraw their stake coins.

Any action by the SEC banning crypto staking could drive investors away from centralized exchanges like Coinbase to other decentralized staking pools.

Crypto exchange Coinbase recently settled a case alleging the sale of unregistered securities in its favor.

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