Coinbase has updated its staking service terms and conditions in response to the recent US Securities and Exchange Commission (SEC) crackdown on these products. The move comes a month after the U.S. Securities and Exchange Commission fined U.S.-based exchange Kraken $30 million for allegedly violating securities laws on its collateralized products.
#Coinbase Update pledge terms: $SOL, $atom, $ADAand $XTZ Assets must now be unstaked @azcoinnews https://t.co/TkwKWWoRMF
— Kyptos (@azcoinnews) March 11, 2023
Staking is the process by which users lock up cryptocurrency to keep the blockchain network running, for which they are rewarded. Exchanges such as Coinbase offer staking for their customers, but this can be a complicated process to do on your own.
In the case of Coinbase, the exchange merely acts as a service provider connecting clients, validators, and the protocol, emphasizing that clients will be rewarded through the protocol rather than Coinbase itself. This is a bone of contention among U.S. regulators.
The biggest change in Coinbase’s updated terms and conditions is that users will now have to unstake before selling or transferring certain assets, making its service more in line with native staking services that exist on the blockchain network. Assets that must currently be unstaked on Coinbase are Solana (SOL), Cosmos (ATOM), Cardano (ADA), and Tezos (XTZ).
Source: Coinbase
For example, in the past users who held SOL on Coinbase could passively earn staking rewards without opting into the service, and could transfer and sell these assets at any time, but this is changing. Coinbase now warns that due to Coinbase’s protocol rules and processing times, it could take “hours or weeks” for any asset staked on the platform to be unstaked and then transferred or sold. .
In an email to customers, Coinbase emphasized that staking will continue and customers will still be rewarded through the protocol. However, the update shows that Coinbase is taking steps to address regulators’ concerns about its staking services, specifically regarding its compliance with regulatory requirements for staking services. securities. The SEC has previously warned that rewards offered by staking services can be securities and be regulated.
The move by Coinbase shows that regulators are stepping up scrutiny of staking services offered by U.S. cryptocurrency exchanges. As the cryptocurrency industry continues to evolve, regulators may review new products and services to ensure compliance with applicable laws and regulations.
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Mingying
according to Kyptos
