Coinbase Calls on States to End Lawsuits Over Staking Services
Cryptocurrency exchange Coinbase is urging five U.S. states to abandon their lawsuits over the company’s staking services, warning that the legal actions are harming consumers and creating uncertainty.
In a blog statement, the U.S.-based public crypto exchange said that while most regulators have backed off, actions in California, New Jersey, Maryland, Washington, and Wisconsin “continue to harm residents in those states.” According to the exchange’s estimates, residents in those states “have missed out on an estimated $90 million+ in staking rewards since June 2023” because of cease-and-desist orders still in place.
“[…] the SEC and ten states sued Coinbase, alleging that our staking services were securities. Several of those states went even further by issuing cease-and-desist orders that immediately prevented Coinbase —and only Coinbase — from staking new assets for users.”
— Coinbase
As of late April, several crypto exchanges besides Coinbase, including Kraken and Binance.US, are also offering staking services for a range of cryptocurrencies, though their availability varies by state.
Coinbase framed the remaining lawsuits as out of step with the broader regulatory direction, adding that “continued litigation by the holdout states is more indefensible than ever.” The exchange also warned that these lawsuits “don’t protect consumers – they confuse them and expose them to greater risk.”
In late April, Oregon Attorney General Dan Rayfield sued Coinbase, claiming the company didn’t do enough to protect consumers from unregistered and risky cryptocurrencies, breaking Oregon’s securities laws.
Coinbase’s chief legal officer Paul Grewal criticized Oregon’s lawsuit as a “copycat” of the SEC’s previous action, asserting that it recycles arguments the federal agency has already abandoned.