Brian Armstrong, the CEO of Coinbase (NASDAQ:COIN), in reacting to the rumors about the U.S. Securities and Exchange Commission (SEC) potentially preventing retail investors from engaging in cryptocurrency staking, says it would be a terrible path for the U.S.
In a recent tweet, Armstrong expressed concerns over rumors he has been hearing about a potential ban by the U.S. SEC on crypto staking for retail investors.
Armstrong explains that banning staking, which allows users to “participate directly in running open crypto networks” for profits, will negatively impact the growth of crypto in the United States. He tweeted:
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The SEC’s crusade on hunting down cryptos they consider securities is no longer news. From the XRP battle to the SEC labeling nine cryptos, including AMP (OTC:AMLTF), RLY, POWR, and LCX securities in the world’s first insider trading.
According to SEC Chairman Gary Gensler, cryptocurrencies that allow staking could be classified as securities under the Howey test. The SEC appears to see staking as lending rather than allowing users to join in providing security for proof of stake networks.
In August 2022, Coinbase received “investigative subpoenas” over its staking programs and yield-generating products. Similarly, crypto exchange Kraken is currently being probed for whether it breached rules around offering securities.
Although Armstrong and most crypto experts argue that staking doesn’t make crypto assets securities, the SEC doesn’t see it that way. The SEC seems to think any crypto asset capable of producing yield is a security.
Without a doubt, a ban on crypto staking will surely harm the growth of the crypto industry, possibly beyond the United States. According to a report from Staked, the value of staked assets amounted to about $42 billion in Q4 of 2022.
The rumors of banning staking come on the heels of Ethereum, the second biggest crypto preparing to allow users unstake their assets locked on the network since December 2020.
Armstrong is advocating that new technologies like this be allowed to grow in the U.S., and not be stifled by a lack of clear rules. He insists they can work with the SEC together to draft clear rules for the industry.
The U.S. continues to take enforcement actions against the crypto industry, all the while lacking a clear regulatory framework for the industry.
Read about the latest enforcement move from the SEC below:
US SEC Announces Plans to Monitor Crypto Brokers and Advisors,
Find out more about the Coinbase probe in:
The SEC Opens Probe into Coinbase’s Crypto Yield and Staking Products
See original on DailyCoin
Source: Cryptocurrency - investing.com
