Table of Contents
It seems as if regulators, and specifically the SEC, have declared an all-out war on cryptocurrencies. Rumors are floating that the United States Securities and Exchange Commission (SEC) would like to ban retail investors from participating in cryptocurrency staking. According to a Twitter thread by Coinbase CEO Brain Armstrong, the SEC is seeking a ban on crypto staking in the U.S.
Regulators have been doubling down on their scrutiny of the crypto sector following the collapse of several major players in the industry, which sent the crypto market into a downward spiral. Fear is spreading that the SEC wants to come after cryptocurrency staking, or so says Coinbase CEO Brian Armstrong.
In a Twitter thread, the Coinbase co-founder said:
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.
Cryptocurrency staking is the practice whereby users can deposit proof-of-stake tokens to a blockchain to secure the network and, in such a way, receive rewards for doing so, such as on the Ethereum network.
SEC Goes on a Crypto Crusade
Since the collapse of FTX in November, the SEC has firmly placed crypto assets under its scope by naming it as one of its top priorities for examination in 2023. The Division of Examination of the SEC recently published its list of priorities for the year in which it said:
The Division will conduct examinations of broker-dealers and RIAs that are using emerging financial technologies or employing new practices, including technological and online solutions, to meet the demands of compliance and marketing and to service investor accounts.
The regulatory body claims the goal of the Division is to ensure “adequate risk management and standards of care” are observed.
On Wednesday, Bloomberg reported the crypto exchange Kraken faces an investigation by the SEC over allegations it offered unregistered securities.
Armstrong has been vocal regarding his view of the SEC and its chairman, Gary Gensler’s, approach to cryptocurrencies. The Coinbase CEO says the SEC “regulation by enforcement” will see many firms pack their bags and operate offshore. Arguing it as a matter of national security, Armstrong said:
We need to make sure that new technologies are encouraged to grow in the U.S. and not stifled by a lack of clear rules. When it comes to financial services and Web3, it’s a matter of national security that these capabilities be built out in the U.S.
As the SEC has yet to comment on the matter, we wait with bated breath to see what comes of these claims.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.