Well-known US crypto exchange, Coinbase recently declared that it would temporarily prevent users from staking new assets in four states due to legal action taken from state authorities.
In a blog post published on July 14, Coinbase stated that customers in California, New Jersey, South Carolina and Wisconsin would be prohibited from using specific staking services until further notification. Regulatory agencies in 10 U.S. states started their own legal actions following the U.S. SEC complaint against the cryptocurrency exchange in June for providing unregistered securities, leading to the termination of some services.
Coinbase stated that it “strongly disagrees with any claims that its staking services constitute securities.” “But we will fully abide by any preliminary governmental orders that are necessary, although it occurs before we have a chance to defend ourselves.”
Coinbase claims that only the acts of the regulators in South Carolina, New Jersey, Wisconsin and California call for a halt to the staking of crypto assets. Individuals who reside in Kentucky, Alabama, Maryland, Illinois, Vermont or Washington are “eligible to stake cryptocurrency just as they were earlier.”
The declaration came after the preliminary motion hearing in the SEC’s complaint against Coinbase.
The SEC submitted a complaint on June 6, alleging that the digital currency exchange has operated as an unregistered security broker since 2019. Overall, Coinbase rejected all of the accusations.
State and federal regulators have targeted various other cryptocurrency companies that are offering staking services and breached securities laws.
In a $30 million settlement with the SEC reached in February, Kraken agreed to discontinue providing staking services or products to clients in the United States.
