In a land where five U.S. states stand like stubborn mules, Coinbase finds itself in a battle of wits, defying the SEC’s guidance and a federal lawsuit that has been tossed aside like yesterday’s news. The air is thick with controversy, and the stakes are high—much like the prices of the crypto they’re arguing about!
As the U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance clarified that some crypto staking services are not securities, these five states—like a group of old men at a diner—refuse to let go of their outdated beliefs. Coinbase’s CEO, Brian Armstrong, took to the social media platform X on May 30, expressing his exasperation:
“Five states are still clinging to a ridiculous theory about crypto staking, harming their own residents, even after the federal government has thrown them a lifeline. We will keep fighting for your rights, folks!”
His words echoed the sentiments of Coinbase’s Chief Legal Officer, Paul Grewal, who declared: “We now have confirmation from the SEC’s Corp Fin of what we’ve all long known: staking as a service isn’t a security. You know it, I know it, the SEC knows it… and those five stubborn states know it too. It’s high time they move on!”
The saga began in June 2023 when the SEC and ten states accused Coinbase of peddling unregistered securities through its staking services. Coinbase, like a boxer in the ring, defended itself with vigor, asserting that its staking program was as safe as grandma’s apple pie. They promised users would never suffer financial losses, and in the unlikely event of a hiccup, they’d indemnify them. Grewal and his team argue that staking-as-a-service is a regulated, secure way for users to earn rewards without needing a PhD in blockchain technology.
But wait, there’s more! In addition to their courtroom antics, Coinbase launched public education campaigns, working with policymakers to create a clearer regulatory framework for digital assets. Because who doesn’t love a good educational campaign, right? 🎓
Despite a broader shift in regulatory stance—including the SEC dropping its own lawsuit in February and five states (Illinois, Kentucky, South Carolina, Vermont, and Alabama) following suit—California, New Jersey, Maryland, Washington, and Wisconsin remain as stubborn as a mule in a mud pit. An April 25 Coinbase blog post noted that ongoing cease-and-desist orders in four states have cost residents over $90 million in missed staking rewards since June 2023. Coinbase argues these holdouts aren’t protecting consumers; they’re just pushing them toward less regulated platforms and creating more uncertainty than a cat in a room full of rocking chairs. 🐱
Coinbase continues to call for these remaining states to drop their lawsuits and join the rest of the country in recognizing staking as a legitimate and non-security digital asset service. Because, let’s face it, who doesn’t want to be on the right side of history?
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2025-06-01 00:27