The CEO of Coinbase is concerned about the ambitions of the SEC to act against crypto staking

The CEO of Coinbase is concerned about the ambitions of the SEC to act against crypto staking

On February 9, Brian Armstrong warned that they heard rumors that the Sec "Wer" crypto staking would like to abolish for private customers in the USA ".

he said he hoped that this was not the case, because "I think it would be a terrible way for the United States if that were allowed."

Armstrong emphasized some of the advantages of the stuck and added that it brings many positive improvements to the industry. This includes scalability, increased security, reduced CO2 balance and the possibility for users to participate in the operation of a crypto network.

1/ We hear rumors that the SEC wants to abolish crypto staking in the USA for private customers. I hope this is not the case because I think it would be a terrible way for the United States if this were allowed.

- Brian Armstrong (@brian_armstrong) 8. February 2023

sec: regulation through enforcement

However, the SEC has other ideas and wants to treat proof-of-stake token as well as stocks-as securities.

The coin base boss warned that the United States should be a place where new technologies and innovations are promoted "and not suffocated by the lack of clear rules".

"When it comes to financial services and web3, it is a question of national security that these skills will be expanded in the United States."

The SEC has regulated with its constant raids and lawsuits against crypto companies through enforcement. It still has to provide clear guidelines or framework conditions for fintech companies, instead it carries out industry examinations to find goals that can accuse of selling securities.

"Regulation through enforcement does not work," said Armstrong, before adding: "It encourages companies to operate offshore what happened at FTX."

Last year paradigm published a report in which it is said that Proof-of-Stake does not include a "ordinary company", as described in the Howey test that the SEC uses to determine what it sees as security. The report came to the conclusion:

"When analyzing the economic realities of the ETH staking on the Ethereum's proof-of-stake network, a dish should find that staking does not meet the Howey test, since there is no" joint company "and validators never rely on the" efforts of others ". ”

Cardano founder has an excavation

Cardano founder Charles Hoskinson took the opportunity to hand over a swipe to his competitor instead of standing together for the good of the entire industry.

"Ethereum staking is problematic. If you temporarily hand over your assets to someone else so that it receives a return, it looks very much like regulated products."

The SEC indicated that the ETH is a security due to its staking mechanism, but then the premise could apply to all proof-of-stake tokens, it should be anchored by law.

.