U.S. regulators have continued to put more regulations on the crypto industry, and rumours have spread that their next destination is examining crypto staking. The Coinbase co-founder and CEO Brian Armstrong shared his view on Wednesday through a tweet. “We’re hearing rumours that the SEC would like to get rid of crypto staking in the U.S. for retail customers, I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.”
Staking is a method by which users add proof-of-stake tokens to a blockchain to contribute to network security, with stakers earning rewards in return.
In response to the tweet of Armstrong, a Twitter commentator, claimed that a multi-agency action was put out for Coinbase. Sources related to the matter in a closer manner told Decrypt that the claim had nothing backing it up. Similarly, the legal officer at Coinbase, Paul Grewal, said, “Totally false.”
The FTX Collapse and Crypto Staking
After the FTX collapse in November of 2022, the SEC focused significantly on crypto staking and digital assets. The agency mentioned, “The Division will conduct examinations of broker-dealers and RIAs that are using emerging financial technologies or employing new practices, including technological and online solutions to meet the demands of compliance and marketing and to service investor accounts.”
Bloomberg reported Wednesday information regarding the cryptocurrency exchange Kraken. Saying they are under investigation by the SEC for allegedly selling unregistered securities. Gary Gensler, the chairman of the SEC, and others have been accused of taking appropriate actions, which Armstrong and others claim will encourage businesses to operate abroad.
However, regulators and politicians such as U.S. Senator Elizabeth Warren said that the crypto world is “scared of a strong SEC.” In addition, mentioning that the crypto industry needs to take many more steps through the market as a whole.
Armstrong went further and said, “We need to make sure that new technologies are encouraged to grow in the U.S. and not stifled by lack of clear rules. When it comes to financial services and Web3, it’s a matter of national security that these capabilities be built out in the U.S.”
The Adoption of Digital Payments
An hour after Armstrong’s initial tweet, Coinbase tweeted its support for crypto staking and said that because it does not require the establishment of pricey centralized intermediaries, it has the potential to promote the adoption of digital payments around the world.
Coinbase writes, “For staking to work successfully, it needs to remain decentralized, neutral, and global.” The FTC, CFTC, Justice Department, and the IRS are some other U.S. government entities that have entered the cryptocurrency space.
Armstrong wrote, “Hopefully, we can work together to publish clear rules for the industry and come up with sensible solutions that protect consumers while preserving innovation and national security interests in the U.S.”