Despite the recent SEC crackdown on staking services offered by centralized providers, Coinbase has reassured its customers that its staking services will continue and may even increase.
In a customer email, Coinbase outlined its updated staking terms and conditions, which explicitly state that users earn rewards from the decentralized protocols and not directly from the exchange itself.
The email also emphasizes that Coinbase acts only as a service provider connecting the validators and the protocol, as opposed to offering a share of its own staking rewards.
This move by Coinbase to make a clear distinction between protocol rewards and being a service provider appears to be an effort to avoid any potential gray area issues that competing exchange Kraken recently faced. As part of a $30 million settlement, Kraken agreed to pay for allegedly failing to register its staking-as-a-service program with the SEC.
When users contribute their tokens to Kraken's staking programme, the SEC claims they lose custody of their tokens and that investors are promised "outsized returns untethered to any economic realities" but in fact, Kraken can pay "no returns at all."
Coinbase has argued that its staking services are fundamentally different from Kraken’s, and CEO Brian Armstrong has stated that the firm is willing to defend its position in court if needed. With Coinbase’s staking services continuing and potentially increasing, despite the SEC crackdown, it appears that the exchange is confident in its position and is taking proactive steps to avoid any potential legal issues.
Overall, this move by Coinbase is reassuring for customers who have invested in staking services and shows that the exchange is taking steps to ensure that it is operating within regulatory boundaries.
As the cryptocurrency industry continues to evolve, it is essential that exchanges work within regulatory frameworks to protect their customers and ensure the long-term sustainability of the industry.
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