• Coinbase has suspended Algorand staking rewards due to increased regulatory pressure from the SEC.
• Algorand Foundation’s CEO Staci Warden tweeted that it was in light of recent regulatory scrutiny which led to the suspension.
• Coinbase has sent a petition outlining reasons why its staking services should not be under the jurisdiction of the SEC.
Coinbase Suspends Algorand Staking Rewards
Coinbase has made a rapid decision to halt offering Algorand staking rewards due to increasing regulatory pressure from the Securities and Exchange Commission (SEC). On Wednesday, March 22, Coinbase announced it would no longer offer Algorand token rewards as of Match 29th with no explanation given for its action.
Algorand Foundation’s CEO Staci Warden tweeted that it was in light of recent regulatory scrutiny which led to the suspension. According to Warden, Coinbase informed them they are evaluating their services and „for that reason, they will no longer support Algo rewards for Retail customers.“
The SEC has clamped down on Kraken for its staking services and now other exchanges are looking to be proactive to avoid similar action by regulators. Crypto staking rewards have become a controversial topic, especially in the U.S., prompting Congress step in and establish rules governing such activities.
Coinbase has tried to be proactive and outline further reasons why its staking services should not fall under the jurisdiction of the SEC in a recently sent petition but this appears to have fallen on deaf ears as the SEC served Coinbase with subpoenas related to their operations last month. In addition, other crypto exchanges such as Binance US have also suspended their own staking services due to potential legal issues arising from providing such rewards without proper authorization or registration with regulators. Furthermore, U.S.-based users may be exposed if they receive unregistered securities through these services without prior knowledge or consent from authorities involved in cryptocurrency regulation like FinCEN or CFTC.