• Coinbase petitioned the SEC to exclude staking from securities law due to their recent crackdown on crypto firms.
• Coinbase’s CEO Brian Armstrong initially tweeted a blog about why their staking services are not securities.
• The 18 page petition sent to the SEC discussed how staking does not meet the criteria of the Howey test and why it should be excluded from the SEC’s jurisdiction.
Coinbase Petitions SEC
Coinbase has recently petitioned the Securities and Exchange Commission (SEC) in an attempt to exclude crypto staking from securities law, due to their hardline approach towards crypto firms.
Armstrong Defends Staking
In response to Kraken paying a $30 million fine and shutting down its staking services due to its infringement of securities law, Coinbase’s CEO Brian Armstrong tweeted a blog outlining why their staking services are not securities.
Petition Sent To SEC
Coinbase then took action by sending an 18-page petition directly to the SEC in order to explain why staking can’t be universally labelled as securities. The document highlights several reasons why the SEC’s approach is wrong and how it shouldn’t fall under its jurisdiction, along with historical precedents and legislation in defense of crypto staking.
Falling Outside Of Howey Test Criteria
Coinbase stated that its core staking services do not involve investment money – rather users give up temporary use of assets which they retain full control over. Additionally, these core services do not meet criteria set out by the Howey test for investment contracts.
Crypto Regulation In U.S.
The lack of legal framework in the U.S means that regulation is currently being applied through courts; however Coinbase is attempting to defend itself with existing laws and previous precedents in order for crypto-stakers rights remain intact.
