Crypto staking or crypto betting services in the US seems to be under threat. The Securities and Exchange Commission have made betting the latest enemy of traditional finance, but apparently there are still some companies intent on fighting back. On February 13, Coinbase's chief executive, Brian Armstrong said that his staking service does not include securities. He added that his company would be happy to defend it in court if necessary. 

 

staking crypto
staking crypto

 


On February 9, the SEC accused the Kraken exchange of selling unlisted securities through staking a product-as-a-service. As a result, the company was fined $30 million and ordered to shut down their corporate services. The move eventually shook the crypto industry and companies that provide betting services in the US. 


Coinbase: Staking is not a security

 

The definition of safety is determined using the Howey test. This relates to a case from the Supreme Court in 1946 that determined whether a transaction qualifies as an "investment contract". According to the SEC, most crypto assets and betting services are investment contracts. This results in them having to be registered and regulated in the same way as stocks and shares of companies, according to SEC chairman Gary Gensler. Then Coinbase denied this claim. They said that betting is not part of securities under U.S. securities laws or under the Howey test. 


In a blog post released shortly after Kraken's enforcement, the company said that staking failed to meet the four elements of the Howey test. This includes investing money, joint ventures, reasonable profit expectations and the efforts of others. Coinbase shares plunged by 18.5% after the crackdown on Kraken due to high concerns that the company would be targeted by the SEC next. In addition, regulators targeted stablecoin issuer Paxos over the weekend. This sent a notice of Welss, threatening legal action over the issuance of the world's third-largest stablecoin, Binance (BUSD). According to SEC data, stablecoins are now securities as the war on crypto continues. 


Lido DAO's Concerns Conveyed


On February 12, the industry's largest crypto staking provider LIDO warned about the consequences of the latest SEC crackdown. Speaking to Bloomberg, Jacob Blish, who is the business development of Lido DAO, said that staking providers are facing various new implications. According to him, the most disappointing thing is that they as an industry continue to be asked to be transparent, but then Blish as a US citizen does not get transparency and how the regulatory process works. 


That's the explanation of "EUR/USD Today, February 10, 2023". Also read our other articles, such as an explanation of how to buy cryptocurrencies, only in the GIC Journal. Keep updating other news through the GIC Journal every day to find out more information. Trade on GIC using an ECN account to enjoy trading with low spreads starting from zero!