• Coinbase sent a petition to the SEC pleading for staking to be excluded from securities law.
• The petition discussed why staking services should not fall under the SEC’s jurisdiction, using legal precedents and legislation as support.
• Coinbase CEO Brian Armstrong previously tweeted a blog outlining why its staking services are not securities.
Coinbase Pleads with SEC
Coinbase has sent an 18-page petition to the U.S. Securities and Exchange Commission (SEC) arguing that crypto staking should not be considered securities under law. The recent crackdown on crypto firms by the SEC has been particularly hardline, with the regulator taking aim at Paxos, Binance, Ripple, and Kraken’s staking services.
Why Staking Shouldn’t Be Labeled as Securities
The petition states that staking isn’t a monolith operation concept – some models may fall under investment contract offerings, but not all will. Coinbase claims its core staking services don’t meet the criteria of the Howey test because users are giving up temporary use of their assets instead of money and have full control over their assets when they participate in a service provider’s offering.
Defending Staking Services in Court
Coinbase CEO Brian Armstrong previously tweeted a blog outlining why its staking services are not securities with an assurance to defend this stance in court if necessary. The exchange is now doubling down on this assertion by approaching the SEC directly through its petition which highlights several reasons why the regulator’s approach to staking is wrong and how it should not fall under their jurisdiction with historical precedents and legislation used as evidence of defense.
Previous Precedent
There is no set legal framework in place for crypto regulation in the U.S., meaning rulings such as these must come through courts rather than politicians or regulators alone making decisions about what does or does not constitute accepted practice within cryptocurrency fields such as staking services.
Conclusion
Coinbase’s petition hopes to persuade the SEC that some forms of crypto staking do not warrant being labeled as securities, freeing them from heavy regulation from authorities like themselves – potentially allowing more freedom for businesses providing these kinds of services going forward without fear of reprisals from regulators like those seen recently towards Kraken et al..