Coinbase is Set to Argue That its Staking Is Not a Security
As the U.S. Securities and Exchange Commission (SEC) tightens its grip on the crypto space, the American mammoth company Coinbase is getting ready to prove that it’s not a security.
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The U.S. exchange Coinbase is ready to have a conversation with the U.S. Securities and Exchange Commission (SEC).
On March 20, the major crypto player published a document dubbed “Petition for Rulemaking – “Proof-of-Stake” Blockchain Staking Services”, addressed to the SEC’s Secretary Vanessa A. Countryman.
In it, the company tries to explain why its staking service is not a security – a supposition that is reportedly held by the SEC as it continues its crackdown on the crypto industry and already fined the Kraken staking service.
Coinbase points out that staking services are not a monolith.
“A number of different models exist and while some might be categorized as offering an investment contract, core staking services that we describe in this letter are not. These services do not fit the definition of a securities offering when applying the analysis laid out in the Supreme Court case, SEC v. W. J. Howey Co. and as refined over the years,” the company says.
In particular, the company claims that the core staking services do not involve an investment of money since the users give up temporarily is the alternative use of their assets, not money.
The exchange also calls for regulatory clarification – a request that is widespread among the companies due to the lack of it.
The SEC is yet to provide an answer to Coinbase’s petition.
To understand why the SEC is crypto’s nemesis, read our article here.
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