In summary

• Coinbase supports staking and will fight bans imposed by certain states, but will stop offering the service to new customers in California, New Jersey, South Carolina, and Wisconsin.
• The United States Securities and Exchange Commission sued Coinbase last month for allegedly failing to register and offering exchange and staking services without proper registration.
• Staking is the process of locking up cryptocurrency to keep a blockchain network running, and is the subject of regulatory controversy in the United States. The SEC also fined Kraken for similar alleged violations.

Coinbase, the largest cryptocurrency exchange in the United States, said in a statement today that it supports staking and will fight it in court, but will stop offering this service to new customers in California, New Jersey, South Carolina and Wisconsin.

In a statement released on Friday, the San Francisco-based cryptocurrency firm asserted that “Americans in every state deserve access to the same technology and economic opportunities as people everywhere,” and therefore will oppose the staking ban imposed by certain states.

But for now, customers in all four states will not be able to stake additional assets through Coinbase while these actions are pending.

“Due to actions taken by state regulators in California, New Jersey, South Carolina, and Wisconsin, customers in those states will not be able to stake additional assets through Coinbase while these actions are pending,” the firm said, adding. that the cryptocurrencies of the clients that were already staked before these orders were issued will not be affected.

The news comes after the United States Securities and Exchange Commission sued Coinbase last month for allegedly failing to register as an exchange, clearinghouse, and broker, despite offering investors these services.

Wall Street’s largest regulator has also alleged that Coinbase offered and sold unregistered securities through its staking service.

Soon after, a state task force that includes California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, Wisconsin along with Alabama filed charges against the company for violating securities laws.

Staking is the process of “locking up” cryptocurrency to keep a blockchain network running. Those who own proof-of-stake assets, such as Ethereum (ETH), the second-largest cryptocurrency by market capitalization, commit it to the network by sending it to a specific address on the blockchain and can receive rewards for doing so. .

Staking is a controversial topic: In February, the SEC fined US cryptocurrency exchange Kraken $30 million for allegedly failing to register the offer and sale of its cryptocurrency staking services program.

Stay on top of crypto news, get daily updates in your inbox.

source: decrypt.co