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Rumors of SEC staking ban
Brian Armstrong, CEO of major U.S. cryptocurrency exchange Coinbase, tweeted on the 8th, referring to rumors that the U.S. Securities and Exchange Commission (SEC) is about to ban staking.
If the rumors were true, he said, “America is on a stupid path” and called for the industry to unite.
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
We’ve heard rumors that the SEC wants to eliminate crypto staking for retail investors in the US. I think it would be a terrible way for the United States if that was allowed, so I pray that it doesn’t happen.
Staking is a mechanism in which rewards are obtained by depositing a certain amount of crypto assets (virtual currency) for a predetermined period of time.
US Coinbase began offering Ethereum (ETH) staking agency services to customers in April 2021. In August 2010, the institutional investor service “Coinbase Prime” also started supporting ETH staking.
Withdrawal of staking ETH is scheduled to be lifted in Ethereum’s next major upgrade “Shanghai” in March, and the possibility of tightening regulations on PoS stocks before that may worsen investor sentiment. There seems to be
connection: Ethereum successfully processed staking withdrawals on testnet
Armstrong, citing a paper by VC giant Paradigm, argues that staking is not a security. The paper argues that “ETH staking without a common enterprise does not meet Howey’s common enterprise principle,” referring primarily to the Howey test to determine securitization.
connection:What is the Howey test to determine whether a virtual currency is a “securities”?
Armstrong also emphasized that staking is a very important innovation in cryptocurrencies. He points out that users can directly participate in the running of an open network, with many benefits such as scalability, improved security and reduced carbon footprint.
New technologies must be allowed to grow in the United States and not be hampered by a lack of clear rules, he said.
Building these capabilities outside the United States is a matter of national security. Coercive regulation does not work. It encourages companies to operate overseas, as FTX did.
According to a report by Staked, a staking service provider, as of the end of 2020, total staking assets were approximately $42 billion (5.5 trillion yen), and annual staking fees were estimated at $3 billion (400 billion yen). ing.
connection:Coinbase Institutional Investor Service Now Supports Ethereum Staking
SEC trends
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said in September 2022 that cryptocurrencies that employ staking and intermediaries such as exchanges that provide staking services can be classified as securities. rice field.
At that time, Mr. Gensler’s remarks were made just a few hours after the implementation of a large-scale upgrade “merge” to Ethereum’s PoS, which may have hinted at the possibility of Ethereum being regulated by the SEC as a security. It has attracted attention.
connection:U.S. SEC Chairman Gensler “Possibility of PoS Virtual Currency as Securities”
The SEC today issued a warning to investors that cryptocurrencies offered through individual retirement accounts (IRAs) by unregistered cryptocurrency trading firms constitute unregistered securities.
Securities may be offered without SEC registration or exemption from registration and may not have been presented with complete or accurate information to assist investors in making informed decisions.
In 2021, the SEC launched an investigation into the possibility that yield products (interest-bearing account services) provided by the cryptocurrency lending platform BlockFi violated securities laws. In February 2022, BlockFi agreed to register the product as a security and settled with the SEC for approximately 14.3 billion yen ($100 million).
connection:U.S. SEC Chairman Gensler “Possibility of PoS Virtual Currency as Securities”
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