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Coinbase reiterates ‘staking services will continue,’ despite SEC’s crackdown

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Coinbase reiterates 'staking services will continue,' despite SEC's crackdown

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  • Coinbase reiterated to customers that its staking services will continue, and may actually increase, despite SEC’s crackdown.
  • The exchange explicitly stated that its users earn rewards from decentralized protocols and not from the exchange.

The United States Securities and Exchange Commission (U.S. SEC) has continued to crack down on staking services offered by centralized providers. However, Coinbase has reiterated to customers that its staking services will continue, and may actually increase.

Coinbase has updated its staking terms and conditions, effective 29 March, in a new customer email. Popular trader, AltcoinPsycho, shared the detail on Twitter yesterday.

Coinbase explicitly stated that users earn rewards from decentralized protocols rather than the exchange itself, as per its new terms.

Coinbase only acts as a service provider connecting users, validators, and the protocol, rather than offering a portion of its own staking rewards. “Your staked assets will continue earning rewards. If you want to continue staking, no action is required. Your staking rewards may actually increase,” read the email.

Though the idea of continuation and a potential increase in Coinbase’s staking rewards may irritate the SEC, the clear distinction between protocol rewards and being a service provider seems to be a move to avoid any potential grey area issues that competing exchange Kraken recently faced.

SEC’s crackdown on crypto staking services

Kraken agreed to pay a $30 million settlement last month for allegedly failing to register its staking-as-a-service program with the Securities and Exchange Commission. As part of the agreement, Kraken will no longer be able to provide staking services in the United States.

Users lost control of their tokens by offering them to Kraken’s staking program, and investors were offered outsized returns untethered to any economic realities, with Kraken also being unable to pay any returns at all, according to the SEC’s complaint.

Coinbase has repeatedly claimed that its staking services are fundamentally different from Kraken’s. Coinbase CEO Brian Armstrong also stated that the company would gladly defend its position in court if necessary.


Saman is a News Editor at AMBCrypto. Her background in History and English expanded on her knack for editing and presenting all sides of a story without bias. With a strong will to learn, Saman is always up for exploring unknown territory, and crypto, with its ever-changing landscape, offers just that.
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