Coinbase CEO reiterates that 'staking' products aren't securities

Coinbase CEO Brian Armstrong has attempted to quell speculation that his exchange’s staking products should beryllium classified arsenic securities — upping the ante successful the ongoing statement astir crypto regulations with the United States Securities and Exchange Commission, oregon SEC.

In a televised interrogation with Bloomberg connected March 1, Armstrong said, “Our staking merchandise is not a security,” referring to cryptocurrencies that tin beryllium staked straight connected the speech to make yields. He continued:

“Customers ne'er crook their assets to Coinbase for instance. And we truly conscionable are providing a work that passes done those coins to assistance them enactment successful staking, which is simply a decentralized protocol.”

WATCH: Coinbase CEO Brian Armstrong joins Bloomberg TV after the biggest US cryptocurrency speech posted a $557 cardinal nonaccomplishment and saw gross tumble 75% successful the 4th fourth https://t.co/zEfQ0mSMe0 https://t.co/dJAkxCtft8

— Bloomberg Markets (@markets) March 1, 2023

Armstrong’s mentation mirrors the guidance provided by Coinbase’s main ineligible serviceman Paul Grewal, who told shareholders past period that the exchange’s staking products fundamentally disagree from the output products the SEC is targeting. Grewal was referring specifically to the SEC’s caller enforcement enactment against rival speech Kraken, which settled with the securities regulator for allegedly failing to registry its staking-as-a-service program. As portion of its settlement, Kraken agreed to wage $30 cardinal successful disgorgement, prejudgment involvement and civilian penalties.

After settling with Kraken, the SEC has turned its attraction to Coinbase’s staking products. Specifically, the regulator is investigating whether Coinbase’s staking products conscionable the ineligible explanation of a information nether the U.S. Securities Act.

Related: Crypto Biz: Coinbase has a batch astatine stake

Coinbase has been hemorrhaging money during crypto winter, posting a $557 cardinal nonaccomplishment successful the 4th quarter. Revenues plummeted 75% year-over-year arsenic trading volumes dried up.

After falling 86% successful 2022, Coinbase's stock terms has rebounded sharply this year. The banal is presently trading astir $64, having gained implicit 90% successful 2023.