Coinbase Urges U.S. States to Withdraw Staking Lawsuits Amid Mounting Regulatory Concerns
Summary of the Situation
Coinbase is actively requesting five U.S. state governments — California, Maryland, Wisconsin, New Jersey, and Washington — to withdraw ongoing lawsuits against its staking program. These lawsuits, originally initiated by the U.S. Securities and Exchange Commission (SEC) and ten states in June, allege that Coinbase’s staking services constitute unregistered securities offerings. While the SEC and five states have since dropped their cases, half of the original jurisdictions continue to pursue legal action.
Coinbase’s Position
Paul VanGrack, Coinbase’s Vice President of Legal Affairs, emphasized that these lawsuits are deepening regulatory uncertainty and harming local consumers. According to VanGrack, cease and desist orders in certain states have resulted in residents missing out on tens of millions of dollars in staking rewards, reduced consumer choice, and worsened financial market clarity. Coinbase asserts that staking services are a legitimate part of modern financial innovation and should not be treated like illicit securities sales.
Economic Impact
Coinbase estimates that approximately $90 million in staking rewards have been lost nationwide due to these regulatory actions. The company warns that continued litigation could further increase consumer losses and inadvertently push users toward less-regulated and potentially riskier staking service providers.
Broader Regulatory Strategy
Beyond state-level disputes, Coinbase is intensifying its efforts to advocate for clearer digital asset regulations. It has initiated legal action against the Federal Deposit Insurance Corporation (FDIC) and sent a formal letter urging the SEC to permit its employees to hold digital assets. These moves underline Coinbase’s broader strategy to drive regulatory reforms that support the responsible growth of the cryptocurrency sector.
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