Coinbase to Defend Staking in US Courts: CEO

• Coinbase’s executives are standing up for its crypto staking services, claiming they cannot be classified as a security and threatening to bring the matter to courts in the US.
• Coinbase CEO Brian Armstrong promised that they will ‘defend this in court if needed’.
• According to Coinbase’s chief legal officer, Paul Grewal, staking is not a security under the US Securities Act or Howey test.

Coinbase Defends Staking Services

Coinbase’s executives are defending their crypto staking services, saying that it cannot be classified as a security and threatening to take it to courts in the United States if need be. In response, Coinbase CEO Brian Armstrong tweeted that they will „defend this in court if needed.“ The move follows an agreement between Kraken and the Securities and Exchange Commission on Feb 10th to stop offering staking services or programs to clients in the country.

SEC Claimed Kraken Failed To Register

The SEC claimed that Kraken failed “to register the offer and sale of their crypto asset staking-as-a-service program” which was now qualified as securities. Aside from halting said service, Kraken agreed to pay $30 million in disgorgement, prejudgment interest and civil penalties.

Staking Not A Security Under The US Securities Act

Coinbase’s chief legal officer, Paul Grewal weighed in on the issue with a blog post claiming that “staking is not a security under the US Securities Act nor under Howey Test“. He added further stating that trying to superimpose securities law onto such processes does not help consumers at all but instead makes them unable to access basic crypto services which also pushes users towards offshore, unregulated platforms.

Brian Armstrong’s Tweet

In response to this statement by Grewal, Brian Armstrong posted on Twitter “Coinbase’s staking services are not securities. We will happily defend this in court if needed” sending out an implicit message of assurance for those who use their service.

Kraken Agrees To Pay SEC Fine

Kraken agreed with SEC regarding offering unregistered Staking as a Service Program leading them paying $30 million fine including disgorgement prejudgment interest and civil penalties along with halting said service altogether