Coinbase Suspends Ethereum Staking Reward Payments

Independent of staking regulations

Major US crypto asset (virtual currency) exchange Coinbase announced on the 16th that it will stop paying staking rewards for Ethereum (ETH).

We’ve temporarily paused ETH staking reward payouts to address a minor technical issue. Rest assured, ETH staking is not impacted and rewards are still being earned and will be paid out. We anticipate to resolve this issue in the next 72 hours. https: //t.co/2Cn8K6ZZ1i

— Coinbase Support (@CoinbaseSupport) May 16, 2023

He said the suspension was due to “minor technical issues”. We are currently working to resolve the issue within 48-72 hours.

He also explained that staked Ethereum is safe and rewards will continue to be earned during the payment suspension period. He said he would just stop paying the fees.

In response to this announcement, there was speculation that the suspension of reward payments was related to US regulations, but a Coinbase representative told cryptocurrency media “Decrypt” as follows. Explaining.

connection: What is the virtual currency exchange Coinbase | Information and points to note for investors

Regulations on staking

In the United States, the U.S. Securities and Exchange Commission (SEC) is accelerating regulatory enforcement measures as national-level cryptocurrency regulations are being developed. SEC Chairman Gary Gensler has previously said he believes that all proof-of-stake (PoS)-based cryptocurrencies that involve staking are likely to be securities.

connection: U.S. SEC Chairman Gensler “Possibility of PoS-based virtual currency as securities”

Coinbase actually received a “Wells Notice” from the SEC. Wells Notice is an official document that officially informs companies and individuals that the SEC is planning to take legal action, and the SEC’s investigation includes the company’s staking service “Coinbase Earn”. rice field.

Although it has not actually developed into a lawsuit yet, this speculation has such a background. Coinbase claims that it does not provide securities and intends to take legal action if necessary.

connection: U.S. Court of Appeals Orders SEC to Respond to Coinbase Petition

Staking litigation cases

Although there are minor differences in the services provided by each company, the SEC announced in February this year that the staking service provided by Kraken violated securities laws and was indicted. He claimed that he had to register the business with the SEC beforehand.

connection: US SEC “Kraken’s virtual currency staking service violates securities law”

After the Kraken announcement, Gensler said the SEC is neutral on technology such as staking. He pointed out that the problem with Kraken was that it did not follow the rules of the securities law to disclose information such as risks to investors. said that the service should be provided in

Kraken is no longer offering staking services in the US following the SEC lawsuit.

connection: US SEC Chairman “We are neutral to technology such as staking”

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