Coinbase CEO Brian Armstrong says he’s concerned about rumors of an SEC ban on staking crypto-currencies for retail customers

Coinbase CEO Brian Armstrong has expressed concern over rumors that the U.S. Securities and Exchange Commission (SEC) may eliminate crypto-currency staking for retail customers in the United States. Armstrong insisted that “staking is not a security” and that the trend allows users to “participate directly in the operation of open crypto networks.“

Coinbase CEO worries that the U.S. is stifling staking and innovation in the crypto-currency space.

1/ We’re hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.

Brian Armstrong (@brian_armstrong) February 8, 2023

Brian Armstrong, CEO of Coinbase stated: that he’s heard rumors that the U.S. Securities and Exchange Commission (SEC) is planning to eliminate crypto-currency staking for retail customers in the United States. Armstrong shared his views on Twitter and said he doesn’t believe the top securities regulator should ban crypto-currency staking in the country. “I’hope this isn’t the case“, wrote Brian Armstrong, “as I believe it would be a terrible path for the United States if this were allowed.“

Share a “primer” on the subject written by Paradigm, Armstrong fears that the staking is not a security. “Staking is a really important innovation in crypto“, said the CEO of Coinbase said.. “It allows users to participate directly in the operation of open cryptographic networks. Staking brings many positive improvements to the’space, including scalability, increased security, and reduced carbon footprint.“

2/ Staking is a really important innovation in crypto. It allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.

Brian Armstrong (@brian_armstrong) February 8, 2023

A ban on centralized staking providers in the US would be a boon for Lido. Coinbase sits at 11.5% vs Lido’s 25%.
We can assume nearly all cbETH is from US customers. Lido will receive the vast majority of unlocked cbETH. $LDO https://t.co/VmyamW8thL pic.twitter.com/OTWtMlAT1L

housefire (@chipflare) February 8, 2023

Armstrong argued that new technologies should be encouraged, not stifled, in the United States and that it is important for the country to have clear rules for financial services and web-based industries3 for national security reasons. “Regulation by enforcement does not work“said Brian Armstrong. said. “This encourages companies to operate abroad, as happened with FTX“. Not everyone agreed with Armstrong, as some were quick to criticize staking and decentralized finance (defi). “It’s almost as if defi and staking weren’t decentralized“, said one person in Armstrong’s Twitter feed.

More have fun of SEC Chairman Gary Gensler with a photo featuring a quote that read, “I guess it’s time for more protection.“Another individual tweeted, “In reality, the Howey test is so broad that almost anything is a security. The real test is whether the SEC wants to or feels it can regulate the thing.“Armstrong hopes that the industry will work together to establish clear rules and “reasonable solutions“that protect consumers while “preserving innovation and national security interests” in the country.