Despite recent crackdowns by the United States Securities and Exchange Commission (SEC) against staking services offered by centralized providers, Coinbase has reiterated to clients that its staking services will continue and “in fact may increase.”
In a new email to clients, highlighted by a popular trader, AltcoinPsycho, via Twitter on March 10, Coinbase outlined its updated staking terms and conditions as of March 29.
New email from Coinbase regarding staking:
“Your staked assets will continue earning rewards, no action is required… You earn rewards from the protocol, not Coinbase”
Coinbase basically telling the SEC to take a hike? pic.twitter.com/ckAAaZXsQb
—Psycho (@AltcoinPsycho) March 10, 2023
New email from Coinbase about staking:
“Your staked assets will continue to earn rewards, no action required… You earn rewards from the protocol, not from Coinbase.”
Coinbase basically telling the SEC to go for a ride…
Under the new terms, Coinbase explicitly explains that users earn rewards from the decentralized protocols, not directly from the exchange itself.
“Coinbase acts only as a service provider connecting you, the validators and the protocol”, rather than offering a portion of its own staking rewards,” the email reads, adding that:
“Your staked assets will continue to earn rewards. If you want to continue staking, you don’t have to do anything. In fact, your staking rewards may increase.”
While the idea of Coinbase staking rewards continuing and increasing can potentially rile the SEC, the clear distinction around protocol rewards and service delivery seems to avoid any gray area issues like the ones you recently faced. competitor exchange Kraken.
As Cointelegraph reported, Kraken agreed to pay a $30 million settlement on February 9 for allegedly failing to register its staking-as-a-service program with the SEC. As part of the agreement, Kraken can no longer offer staking services in the United States.
A major aspect of the SEC’s complaint was that users lost control of their tokens when using Kraken’s staking program. Investors were offered “exorbitant returns decoupled from any economic reality,” and Kraken could also pay “no return at all.”
Coinbase has argued that its staking services are fundamentally different from Kraken’s. Chief Executive Officer Brian Armstrong stated on February 10 that the company would be happy to defend its position in court “if necessary.”
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