Shares in Coinbase (NASDAQ:COIN), the only publicly traded crypto exchange in the US, tanked today – perhaps reacting to the SEC’s enforcement action taken against rival crypto exchange Kraken.
In a complaint revealed today, the SEC claimed that crypto staking, or staking as a service, is, in effect a security.
Kraken settled the charges paying a $30 million penalty without admitting or denying the charges. At the same time, Kraken agreed to halt all staking for US customers. International accounts may continue to take advantage of the Kraken staking service.
Yesterday, Coinbase CEO and founder Brian Armstrong took to Twitter to lament the rumblings that the SEC was going to terminate staking as a feature frequently offered on crypto exchanges. Staking allows investors to generate passive income from cryptocurrencies that utilize a Proof of Stake ecosystem. As these digital assets are part of the ecosystem that validates transactions, holders can generate rewards paid out over time.
According to the Coinbase website, the platform offers staking via Coinbase Cloud via 25+ networks.