Coinbase Stop Staking Services In Four US States After Receiving Regulatory Demands

JAKARTA - The United States-based crypto exchange, Coinbase, has announced that it will temporarily suspend customers in four states from staking additional assets due to legal proceedings from local regulators.

In a blog post on July 14, Coinbase stated that users in California, New Jersey, South Carolina, and Wisconsin will be limited from using certain staking services until further notice.

After the US Securities and Exchange Commission (SEC) filed a lawsuit against the crypto exchange in June for offering unregistered securities, regulatory bodies in 10 US states began their own legal proceedings, leading to the suspension of certain services.

"We strongly disagree with the accusations that our staking services are considered securities," Coinbase said. "However, we will fully comply with the initial orders from the state needed, even though it came before we had the opportunity to defend ourselves."

According to Coinbase, only regulatory actions in California, New Jersey, South Carolina, and Wisconsin require suspension of additional asset staking. Alabama, Illinois, Kentucky, Maryland, Vermont, and Washington-based users are still "qualified to stake crypto as before."

This announcement follows the first pre-applicative trial in the SEC case against Coinbase. The commission filed a lawsuit on June 6, on charges that the crypto exchange has been operating as an unregistered securities broker since 2019. Coinbase has largely rejected all of these allegations.

State and federal regulators have targeted other crypto companies that are staking, claiming that the service violates securities law. In February, Kraken reached a US$30 million deal with the SEC, requiring them to stop offering staking services to US clients.