According to reports, Coinbase is temporarily prohibiting clients from staking further assets in four different states due to legal actions brought by state regulators.
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Coinbase Users in 4 US States Affected
In accordance with a July 14 blog post, users in California, New Jersey, South Carolina, and Wisconsin will be unable to utilize staking services until an additional notification is provided.
Coinbase states: “We strongly disagree with any allegation that our staking services are securities,” the firm added: “But we will fully comply with the preliminary state orders where required, even though that comes before we’ve had an opportunity to defend ourselves.”
Users can Engage in Staking Activities in Other Regions
Furthermore, the exchange stressed that the authorities only demand an issue in staking additional assets in California, New Jersey, South Carolina, and Wisconsin while users in Alabama, Illinois, Kentucky, Maryland, Vermont, and Washington are still eligible to stake cryptocurrency.
Coinbase Under Regulatory Crosshairs
Notably, the announcement comes after the Securities and Exchange Commission (SEC) brought a lawsuit against the exchange for offering unregistered securities, prompting regulatory bodies in ten US states to launch additional legal proceedings, resulting in a halt of certain services. The SEC accused Coinbase of functioning as an unregistered security broker since 2019 during the first pre-motion hearing in the SEC’s complaint against the crypto exchange. On the other hand, Coinbase has strongly refuted every accusation.
Regulatory Clarity in the US
The CEO of the crypto exchange, Brian Armstrong, recently stated that the company is confident that the United States will soon obtain “regulatory clarity,” which is critical at the moment. He added at the time, “eventually we get to the right outcome, even if it takes a while.”
He emphasized the significance of the SEC vs. Coinbase action for the overall U.S. crypto business, expressing hope about increased openness and preventing the country from “falling behind” in comparison to the rest of the world.
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