Coinbase, one of the world’s leading cryptocurrency exchanges, has put a halt to its staking services in four states across the U.S., including California and New Jersey.
This move comes in the wake of legal proceedings initiated against the exchange by ten states over its staking product a month ago. Despite previous assurances from CEO Brian Armstrong that staking services would persist despite regulatory objections, the company’s stock has suffered a significant blow, dropping over 9% following this recent development.
Coinbase’s shares experienced a sharp 9% decline after the company decided to suspend its staking services in several U.S. states. This suspension follows a month after ten states collectively initiated legal action against the crypto exchange. On the same day, the Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, accusing it of operating an unregistered securities exchange and offering unregistered securities through its staking service.
Coinbase has publicly defended its staking services. The company, which is the largest crypto exchange in the U.S., revealed that regulators in California, New Jersey, South Carolina, and Wisconsin have demanded it to stop offering its staking product. These state regulators have instructed the exchange to prevent retail customers from staking additional crypto assets while their legal proceedings are ongoing. Coinbase has expressed its disagreement with the allegations surrounding its staking services and has pledged to vigorously defend the product in court.
The recent regulatory order has led to a 9% drop in Coinbase’s share price. The stock fell from a daily high of $113 to a low of $101 before closing at $105. CEO Brian Armstrong had previously assured customers that the SEC’s enforcement action and the legal proceedings initiated by state regulators would not affect the staking services. He stated, “We’re not going to wind down our staking service. Coinbase’s staking product is architected and built in a way to be compliant.”
