Coinbase publishes petition against SEC strike ban

You must have noticed that the US Securities and Exchange Commission (SEC) has been lashing out at the crypto industry in recent times. This lashing out was reflected, among other things, in the ban on Paxos from marketing to Binance USD (BUSD) and by closing the Kraken staking program. Coinbase is concerned about that latest development and is now sending a petition to the SEC explaining that going on strike is not against U.S. law.

Staking is not investing

Coinbase’s main argument in the petition is that strikes do not essentially equate to investing under US law. According to Coinbase, users only temporarily give up the ability to use the asset in question with a strike, it does not cost them any money. It’s not like a stock where you have to give up money to buy it.

In the case of a strike, you already have an asset, but you put it, as it were, in a machine that eventually produces more units of that asset. There is no time when you can really lose the asset in question.

Ultimately, in the event of a strike, users retain full authority over their asset. Only when it comes to Ethereum is it currently not possible to unstake the asset, but that should also change with the Shanghai upgrade at the beginning of April.

Furthermore, according to Coinbase, there is no form of investment management when it comes to strikes. You put the asset in the protocol or a stock exchange platform arranges it for you and then you receive a return on your crypto in accordance with the agreements.

Important for the industry

In any case, it is important for the industry that Coinbase is right in this. If the SEC manages to ban any kind of strike, it will immediately make Proof-of-Stake projects a lot less attractive. It currently makes Ethereum extra attractive that you can pick up an extra return through staking.

If that were no longer allowed, the crypto industry might no longer be of interest to a certain part of the public. In that respect, it is good that Coinbase is fighting back and is not just giving up in the fight against the US authorities.

For Bitcoin it is not all that relevant, because the largest digital currency in the industry still runs on the Proof-of-Work consensus mechanism. In that regard, a ban on staking programs in the United States might even be a plus for Bitcoin.

Related News

Leave A Reply

Please enter your comment!
Please enter your name here