Coinbase Enhances Staking Service in Response to Regulatory Scrutiny
Coinbase Updates Staking Service Terms and Conditions
Coinbase, the largest cryptocurrency exchange in the United States, has updated the terms and conditions of its staking service. The move comes a month after U.S. regulators cracked down on similar products.
In an email to customers on Friday, Coinbase said that staking will continue and emphasized that clients will earn rewards through protocols and not Coinbase itself. This is a particular point of contention among U.S. regulators like the SEC.
Staking is the process of “locking-up” cryptocurrency to keep a blockchain’s network running. Proof-of-stake assets, such as Ethereum, Cardano, and Solana, require people to pledge the blockchain’s native cryptocurrency to the network and earn rewards for doing so.
It can be a complicated process to do it yourself, so exchanges like Coinbase offer to do the process for their clients. Coinbase acts only as a service provider connecting clients to the protocols that generate rewards.
The updated terms and conditions clarify that Coinbase is not responsible for any losses incurred by clients who participate in staking. The exchange also reserves the right to change the staking rewards at any time.
Coinbase’s staking service has been popular among its users, with over $20 billion worth of cryptocurrency currently staked on the platform. The exchange has faced regulatory scrutiny in the past, and the updated terms and conditions may be an attempt to address some of these concerns.
The move comes after U.S. regulators cracked down on similar products offered by other cryptocurrency exchanges. In December, the SEC charged crypto lending platform Celsius Network with offering unregistered securities in the form of its interest-earning accounts.
The SEC has been cracking down on cryptocurrency companies that offer products that could be considered securities. The agency has said that it will continue to scrutinize the industry and take action against companies that violate securities laws.