BlocksInform
US regulators are tightening their stranglehold on the cryptocurrency, There is speculation that the next target for the securities and exchange commission (sec) could be crypto staking for retail investors.
Coinbase Exchange President Brian Armstrong shared the same thing on Twitter on Thursday.
Banning Crypto Staking Would Be A “Terrible Path” For U.S.
U.S. Regulatory bodies would be interested in forbidding retail investors from participating in crypto staking.
Coinbase’s Brian Armstrong revealed on Feb 9 that he had heard rumours that the SEC is planning to ban cryptocurrency staking completely. Staking is a revenue-generating process that allows users to deposit token evidence of blockchain participation to help secure the network. Participants receive a return on their services. The greater the challenge, the greater the crypto rewards.
This incentive system makes it possible for blockchains like ethereum to function correctly and securely. Withdrawing staked ether after it’s been deposited is not possible until the imminent Shanghai network upgrade scheduled for next month.
“We hear rumours that the SEC wants to get rid of U.S. crypto staking for retail customers," Armstrong tweeted. "I hope not, because I think it would be terrible for the United States if we let that happen.”
2/ Staking is a really important innovation in crypto. 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
The SEC has yet to express an opinion on this rumour. However, the commission made cryptocurrencies a top priority in 2023 after the FTX stock market collapsed last November.
It is to be noted that SEC chairman Gary Gensler has also previously indicated that cryptos that allow staking could be treated as securities. It's in Ethereum's face, who, in September, moved from a work evidence model to an evidence model of the importance of safety, be reported by the SEC regulatory authority in the United States, Commodity Futures Trading Commission of Canada (CFTC).
Armstrong Lambastes SEC’s Regulation By Enforcement
CEO Armstrong further criticized the present lack of clear rules in the U.S. and the subsequent “regulation by enforcement” approach adopted by the SEC that he believes is forcing crypto companies to operate offshore. It reiterated its commitment to working with regulators to establish clearer rules for industry while maintaining innovation.
Quinbase already disagreed with the second one. The agency wants to know if the San Francisco Stock Exchange has allowed the Americans to trade crypto assets that should have been registered as securities. COINBASE has even had to kill its lending product plans after facing intense pressure from the SEC.
Based on data from Staking Rewards, the top five cryptocurrencies capitalized on the stock market represent more than $59 billion of assets at stake. This means a full ban in the U.S. would be a severe blow to the industry, which is still reeling from several high-profile collapses last year.
