© Reuters
Investing.com – In a series of tweets, the CEO of Coinbase Global Inc (NASDAQ:) Brian Armstrong expressed concern over rumors that the SEC would like to ban retail investors from engaging in cryptocurrency staking.
Remember that staking is the method of validating transactions and securing the network of proof of staked blockchains, such as that of Ethereum. To put it simply, staking consists, from the point of view of investors, of “blocking” cryptocurrencies on the network to become “validators” and receive a reward in the form of a return in exchange.
SEC plans to ban crypto staking for individuals according to Coinbase boss
The Coinbase boss therefore wrote: “We are hearing rumors that the SEC wants to get rid of cryptocurrency staking in the United States for retail customers”, adding: “I hope this is not the case, because I believe it would be a terrible path for the United States to let that happen.
Armstrong went on to say that “staking is a really important innovation in crypto” that “allows users to participate directly in the operation of crypto networks” and that “brings many positive improvements to the space, including the scalability, increased security and reduced carbon footprint”.
Note that the transition from a proof of work network (like the ) to a proof of stake network last year has reduced its energy consumption by 99% according to specialists.
The CEO of Coinbase also stressed that it is essential to “ensure that new technologies are encouraged to develop in the United States, and not stifled by the lack of clear rules”, pointing out that in the case of financial services and web3, “it is national security that these capabilities are developed in the United States”.
What is the official position of the SEC on crypto staking?
Note that although some Armstrong followers were surprised by these suspicions, they do not seem completely unfounded.
Indeed, SEC Chairman Gary Gensler has previously said that cryptocurrencies that allow staking could be classified as securities, even though ether has been designated as a commodity by the SEC’s sister regulator. , the Commodity Futures Trading Commission (CFTC).
Following a September 2022 congressional hearing, Gensler further stated that staking was “another indication that, according to the Howey test, the investing public anticipates profits based on the efforts of others.”
Finally, note that according to Staked, a crypto staking service provider, the total value of staked assets was approximately $42 billion in the fourth quarter of 2022, with annualized revenues of $3 billion.