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The CEO and co-founder of core cryptocurrency, Brian Armstrong, believes that the prohibition of retail crypto staking in the US would be a "terrible" move by the country's regulators.
Armstrong made the comments in a Feb. 9 twitter feeds that have already been accessed more than 2.2M times, after noting that they have heard "rumours" that American securities and the foreign exchange commission "want to get rid of crypto staking" for retail customers.
“I hope not, because I think it would be terrible for the United States to have this happen."
Armstrong did not share where the original rumours came from, but noted that staking was 'a really important innovation in crypto.”
'Staking brings many positive improvements to space, such as scalability, increased security and a lower carbon footprint,' he added.
2/ sequencing is a very significant innovation in cryptography. It enables users to be directly involved in the execution of open cryptonets. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.
— Brian Armstrong – @brian_amstrong February 8, 2023
Armstrong also referenced an Oct. 5 blog post of the crypto investment company's paradigm, which argued that Ethereum's transition to evidence of the issue and its subsequent "staking" model does not make it safe.
The Paradigm post came just a few weeks after SEC Chairman Gary Gensler suggested that proof-of-stake (PoS) cryptocurrencies could trigger securities laws. He delivered the speech on September 15 by talking to journalists following a meeting of the Senate Banking Committee.
Armstrong also criticized the current lack of regulatory clarity in the United States and subsequent regulation through enforcement that, in his view, pushes businesses abroad, such as the exchange of ftx cryptography.
He reiterated calls for regulations that provide clear rules for industry while at the same time preserving innovation.
Related: Crypto exchange Kraken faces probe over possible securities violations: Report
According to Staking Rewards, the top four staked cryptocurrencies by market cap account for over $55 billion in staked assets, suggesting a country-wide ban would be a huge hit to the country’s crypto industry, which has already seen an exodus of crypto-related businesses.
Some industry commentators suggested that the SEC could pursue centralized parties that provide staking services as opposed to the technology itself, to believe that the latter's attack would be a losing battle that would "crush them in the previous."
Timely reminder that https://t.co/splf30ft12 Presents the legal arguments for staking according to the howey standard.
I think the second one would probably attack the centralized parties that are doing the staking, not themselves, because it would be a more difficult battle that could crush them into a precedent. https://t.co/YiD2Cpxx6z
— Adam Cochran (adamscochran.eth) (@adamscochran) February 8, 2023
Attorney General of the R&D division of Delphi Digital, Gabriel Shapiro, suggests that there is a strong argument that benchmarking services provided by centralized exchanges such as COINBASE are a title, draw parallels with other "Win" products.
Personally though I do think "win" programs offered by cexs are debt obligations, I believe that it is *possible* to offer a purely pos, even at an EXC, The bid is not a guarantee, in accordance with the terms. But tbqh it's a close case.
— _gabrielShapir0 (@lex_node) February 8, 2023
Coinbase is currently subject to an ongoing SEC probe, which Coinbase revealed in an Aug. 9 SEC filing was in relation to its staking rewards amongst other offerings.
