Coinbase Submits Petition To Explain to SEC That Staking Is Not Securities

United States-based crypto exchange Coinbase decided to communicate proactively on the topic of crypto staking, which had recently gained regulators’ attention. In its petition to the Securities and Exchange Commission (SEC), the company explains why staking can’t be universally labeled as securities.

The Petition for Rulemaking was published by Coinbase on March 20. In an 18-page document, the firm focus on the securities law treatment of services related to the validation of proof-of-stake protocols. It was written in response to the SEC’s February crackdown on Kraken staking program — back then, the Commission charged an exchange with “failing to register the offer and sale of their crypto asset staking-as-a-service program,” which it qualified as securities.

In the petition, Coinbase draws on the notion that staking isn’t a monolith operation concept. While some of the existing models may fall under the definition of investment contract offerings, others clearly can’t. Particularly, it is the core staking services that don’t meet the criteria of the Howey test, the company emphasizes.

(By DAVID ATTLEE)

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