Coinbase, one of the world's largest cryptocurrency exchanges, announced on Friday that it will stop accepting new staking assets from customers in four US states due to ongoing regulatory disputes.
The U.S. Securities and Exchange Commission (SEC) and some state regulators have objected to Coinbase's staking program for allegedly involving the sale of unregistered securities. In June, the SEC sued Coinbase for allegedly violating securities laws by launching a lending product that would also allow users to earn interest on their crypto assets.
Coinbase has denied that staking and lending products are securities, arguing that they are essential to the development and security of the decentralized crypto economy. The company also accused the SEC of being hostile and uncertain towards the crypto industry.
Coinbase said in a blog post that it is working with policymakers in several states to keep the staking program available to all customers, but four states—California, New Jersey, South Carolina, and Wisconsin—have issued orders requiring the company to stop processing new staking assets for residents of those states. .
According to Coinbase, customers who have already staked their crypto before orders are placed will not be affected. The company said it will notify affected customers via email and will provide more information in the help center.
Coinbase added that its staking services will continue to operate normally in other states where there are pending legal proceedings.
*Not investment advice.