Here’s Why Coinbase CEO would shut down ETH staking if needed!
Coinbase Under Investigation
Recently, on the 11th of August, Coinbase confirmed that the U.S. SEC was investigating their company for some of their products, including their newly ETH staking service for U.S institutional clients.
This has caused a lot of nervousness among those in the crypto community as fears arise that the SEC may add more government regulations on Coinbase’s platform.
Because of this, earlier this week, Lefteris Karapetsas, the founder of crypto analytics and accounting app Rotki, tagged several major Ethereum players including Coinbase and asked them a hypothetical question on the possibility of being forced to add regulations by the SEC.
Karapetsas asked on Twitter, “If regulators ask you to censor at the #ethereum protocol level with your validators will you: A) Comply and censor at protocol level / B) Shut down the staking service and preserve network integrity?“
Coinbase CEO’s Response
To this, Coinbase’s CEO, Brian Armstrong responded that although he hopes none of that will have to happen, in the event that the SEC does threaten Coinbase with more government regulations such as forcing them to censor certain Ethereum transactions, he would rather choose to shut down Coinbase’s current ETH staking service.
It's a hypothetical we hopefully won't actually face. But if we did we'd go with B i think. Got to focus on the bigger picture. There may be some better option (C) or a legal challenge as well that could help reach a better outcome.
— Brian Armstrong (@brian_armstrong) August 17, 2022
“It’s a hypothetical we hopefully won’t actually face.” Armstrong continued, “But if we did we’d go with B i think. Got to focus on the bigger picture.“
He added, “There may be some better option (C) or a legal challenge as well that could help reach a better outcome.“
This is due to Armstrong’s strong gravitation towards Ethereum’s decentralized ways. Back in February 4, on a blog post made on the Coinbase website, Armstrong wrote that: “Decentralization is the ultimate customer protection.”
“The decentralized nature of cryptocurrency offers its own important protections here, and those protections get stronger the more our products decentralize,” he wrote. Thus why he claimed to be willing to shut down his ETH staking services purely to preserve the integrity of the blockchain network.