One of the largest cryptocurrency exchange, Coinbase, has decided to temporarily halt its staking services in four U.S. states: California, New Jersey, South Carolina, and Wisconsin; the decision comes after local regulators initiated legal proceedings against Coinbase.
The SEC had sued Coinbase on June 6, accusing the exchange of operating as an unregistered security broker since 2019. Coinbase has denied most of the allegations made against them.
The company disagrees with the regulator’s allegation, “We strongly disagree with any allegation that our staking services are securities,” Coinbase said “But we will fully comply with the preliminary state orders where required”
Coinbase clarified that only the regulators’ actions in the four aforementioned states require the suspension of staking services. Users in Alabama, Illinois, Kentucky, Maryland, Vermont, and Washington can continue staking services.
This is not the first time regulators have targeted cryptocurrency firms offering staking services. In February, another exchange called Kraken settled with the SEC for $30 million, agreeing to stop offering staking services to U.S. clients.
