Key Points:
- The company’s chief legal officer asserts that the Coinbase’s staking service is different and that it is not a security.
- Coinbase will not be affected by news of Kraken being sanctioned by the SEC for translating their staking.
- Still, Coinbase Shares are still down 14%, the most since July.
Coinbase insists Coinbase’s staking service is not a security amid tightening SEC investigation and cancellation of Kraken’s staking service with a $30 million fine.
Coinbase’s chief legal officer said in a statement that Coinbase’s commitment plan will not be affected by yesterday’s Kraken news, the Bloomberg.
As mentioned in an earlier Coincu News article, the U.S. Securities and Exchange Commission (SEC) is apparently looking into whether crypto exchange Kraken is in violation of any rules regarding the crypto exchange Kraken. the sale of securities or not.
After a thorough review, exchange Kraken has “immediately” terminated its crypto commitment service provided to US customers and will pay a $30 million fine to the SEC to settle allegations that it offers unregistered securities.
Kraken is indeed offering a profitable product. However, the legal director insists Coinbase’s staking service is of a different nature, it is not a security. Coinbase will continue to offer staking services going forward.
“Coinbase’s staking program is not affected by today’s news.(…) What’s clear from today’s announcement is that Kraken was essentially offering a yield product. Coinbase’s staking services are fundamentally different and are not securities.”
Grewal said in a statement to Bloomberg News.
However, the news still has a direct effect on the share price of the largest US cryptocurrency exchange. Specifically, shares of Coinbase fell 14%, the biggest drop since July 26. At this point many believe Coinbase is facing a US investigation into whether it allowed Americans to trade digital assets that should have been registered as securities.
Coinbase CEO Brian Armstrong previewed the settlement late Wednesday by criticizing the SEC for allegedly wanting to eliminate cryptocurrency staking by retail investors.
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