Coinbase has confirmed that its staking services will continue, despite the recent crackdown by the SEC on staking rewards programs offered by centralized providers.
In an email sent to customers on March 10, Coinbase outlined its updated staking terms and conditions, which will come into effect on March 29. The email clarifies that users earn rewards from the decentralized protocols, not directly from the exchange itself, and that Coinbase acts only as a service provider connecting validators and the protocol.
The clear distinction between protocol rewards and service provision aims to avoid any issues that Kraken faced with the SEC. As we reported previously, Kraken agreed to pay a $30 million settlement on Feb. 9 for allegedly failing to register its staking-as-a-service program with the SEC, and as part of the deal, Kraken can no longer offer staking services in the United States. The SEC had claimed that users lost control of their tokens when using Kraken’s staking program, and investors were offered “outsized returns untethered to any economic realities,” with Kraken also able to pay “no returns at all.”
Coinbase asserted that its staking offerings differ significantly from those of Kraken, and its CEO Brian Armstrong remarked on February 10 that the company is prepared to defend its stance in court, “if required.” The fact that Coinbase intends to persist with its staking services might alleviate worries for its users, who have been anxious about the SEC’s clampdown. Although it’s uncertain how the SEC will respond to Coinbase’s declaration, the exchange is evidently making efforts to guarantee that its staking services comply with regulatory standards.