Brian Armstrong Opposes Crypto Staking Ban
Brian Armstrong, CEO and co-founder of Coinbase, has expressed opposition to the potential ban on end-user crypto staking in the US. He shared his views in a Twitter thread posted on 9 February, which has since received over 2.2 million views.
Brian Armstrong explains opposition
The Coinbase CEO strongly opposes the potential ban on crypto staking in the United States. In the Twitter thread, he posted that the US Securities and Exchange Commission (SEC) was considering ending retail crypto staking.
He chose not to disclose the rumour's origin, but emphasised the significance of currency locking and quoted it as "a really important innovation in crypto".
According to him, virtual currency locking brings numerous benefits to the cryptocurrency space, including improved scalability, heightened security measures, and a reduced carbon footprint.
He also referenced a blog post from crypto investment firm Paradigm, published on 5 October. It argued that Ethereum's transition to Proof of Stake and its resultant staking model does not classify it as a security.
This argument from Paradigm came just a few weeks after SEC Chairman Gary Gensler raised concerns about proof-of-stake cryptocurrencies potentially violating securities laws while talking to reporters after a Senate Banking Committee meeting on 15 September, 2022.
Armstrong strongly criticised the lack of regulatory clarity in the US and the "regulation by enforcement" approach driving companies, such as the failed exchange FTX, to move offshore. He also emphasised the need for regulation that offers clear guidelines for the industry while promoting innovation.
Crypto staking ban could deal a significant blow to the crypto industry
As reported by Staking Rewards, the top four cryptocurrencies staked by market capitalisation account for more than $55 billion in staked assets. This highlights the potential impact of a nationwide ban on the already struggling cryptocurrency industry, which has seen an outflow of related businesses.
Some experts in the industry predict that the SEC might target centralised token-locking service providers rather than the technology itself. They believe that going after the technology would result in a losing battle that would set a damaging precedent.
Coinbase, one of the leading centralised exchanges, is currently facing an SEC investigation, which was disclosed in an SEC filing on 9 August 2022. The probe is related to Coinbase's staking rewards program and other offerings.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.