Coinbase CEO Says He ‘Will Happily’ Defend Crypto Staking In Court

Coinbase CEO Says He ‘Will Happily’ Defend Crypto Staking In Court. 

CODefending Crypto Staking

After having addressed rumors that the Securities and Exchange Commission (SEC) may be planning to ban crypto staking earlier last week, crypto exchange Coinbase’s CEO Brian Armstrong has taken to Twitter again to explain that he and his company will “happily defend this in court if needed.”

Armstrong also made this announcement just days after the SEC fined the crypto exchange Kraken $30 million and forced them to shut down their staking services due to the exchange reportedly failing “to register the offer and sale of their crypto asset staking-as-a-service program.”

Related: Coinbase CEO Talks Rumours Of SEC Wanting To Ban Crypto Staking!

Coinbase's staking services are not securities. We will happily defend this in court if needed.https://t.co/GtTOz77YV3

— Brian Armstrong (@brian_armstrong) February 12, 2023

Coinbase’s chief legal officer, Paul Grewal wrote on a blog post about the issue, arguing that crypto staking does not qualify as a security as it doesn’t fit into the elements of the Howey Test.

“Trying to superimpose securities law onto a process like staking doesn’t help consumers at all and instead imposes unnecessarily aggressive mandates that will prevent US consumers from accessing basic crypto services and push users to offshore, unregulated platforms.” Grewal wrote.

Consequences Of Staking Ban

Earlier last week, Coinbase CEO Brian Armstrong described staking as “a really important innovation in crypto” and that the act of banning crypto staking would be detrimental and a terrible path for the U.S.

“[Staking] allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.” 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.”

Related: Kraken To Shut Down Crypto Staking Following $30M Fine By SEC

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