• Coinbase, the United States-based cryptocurrency exchange, has announced that it will halt the staking service in four states in the United States.
• The temporary halt on asset staking comes after the regularity issues faced by the crypto exchange.
• Coinbase strongly disagrees with the SEC’s allegation that its staking services are securities.
Coinbase Halts Staking Service in US
Coinbase, a United States-based cryptocurrency exchange, has recently announced that it will be temporarily halting its staking service in four states of America due to regulatory action taken against them. This decision was taken to comply with legal requirements imposed by various state authorities.
Services Suspended Due to Legal Action
The suspension of some services as a result of legal action is said to have been caused by proceedings initiated by ten US states against Coinbase’s retail staking services on June 6th. As a result of this, users based in California, New Jersey, South Carolina and Wisconsin will not be able to use these services until further notice. However, users based in other states such as Alabama, Illinois, Kentucky and Maryland are allowed to stake cryptocurrencies as normal.
SEC Lawsuit Against Coinbase
The US Securities and Exchange Commission filed a lawsuit against Coinbase alleging that they had offered unregistered securities earlier in June 2021. Following this incident, Coinbase has been actively discussing with these state agencies over their services but they have been requested for certain changes before these proceedings can come to an end. This means customers from these four selected states will experience a temporary impact as far as usage of their services is concerned.
Coinbase Disagrees With Allegations
Coinbase has stated its disagreement towards allegations made by SEC claiming that its staking services are securities and not registered ones according to Howey Test standards which list 13 different cryptocurrencies available on their platform . Recently this case made its first appearance in court between both parties involved where SEC argued that all these assets met Howey Test requirements while Coinbase disagreed during hearing sessions held virtually.
As things stand right now , Coinbase is required to suspend some of its offerings limited only within 4 specified US states due to regulatory action taken against them . It remains unclear when exactly this halt would end or what kind of changes might take place during this period . Meanwhile , customers from other US states remain unaffected and still can use coinbase’s staking service without any issue .