United States-based cryptocurrency exchange Coinbase has announced that it will temporarily bar clients from staking additional assets in four states amid legal proceedings from local regulators.
In a July 14 blog post, Coinbase saying users in California, New Jersey, South Carolina and Wisconsin will not be able to use certain participation services until further notice. Following the US Securities and Exchange Commission file a lawsuit Against the crypto exchange in June for offering unregistered securities, regulators in 10 US states launched their own legal proceedings, resulting in the suspension of certain services.
โWe strongly disagree with any accusation that our staking services are securities,โ Coinbase said. "But we will fully comply with preliminary state orders when necessary, even if that happens before we have had a chance to defend ourselves."
According to Coinbase, only actions by regulators in California, New Jersey, South Carolina, and Wisconsin require a pause on additional asset participation. Users based in Alabama, Illinois, Kentucky, Maryland, Vermont, and Washington are "eligible to stake cryptocurrency just as they were before."
1/ As you may have heard, on June 6, 10 US states initiated proceedings related to Coinbase's retail staking services. Let's dive into what this means for our customers. pic.twitter.com/pQidr0Ijc9
โ Coinbase ๏ธ (@coinbase) July 14, 2023
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The announcement followed the first premotion. hearing in SEC case against Coinbase. The commission filed the lawsuit on June 6 alleging that the crypto exchange has operated as an unregistered security broker since 2019. Coinbase has largely denied all allegations.
State and federal regulators have gone after other crypto firms for participating, alleging that the services violated securities laws. In February, Kraken reached a $30 million settlement with the SEC requiring it to stop offering staking services or programs to US clients.
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