On February 9th, Brian Armstrong warned that they were hearing rumors that the SEC wanted to “get rid of US retail betting.”
He said he hoped that wouldn’t be the case because “I think it would be a terrible road for the United States if that happened.”
Armstrong highlighted some of the benefits of the investment, adding that it brings many positive improvements to the industry. This includes scalability, increased security, reduced carbon footprint, and enabling users to co-operate a crypto network.
1/ We are hearing rumors that the SEC wants to get rid of cryptocurrency betting in the US for retail customers. I hope not because I think it would be a terrible road for the US if that happened.
– Brian Armstrong (@brian_armstrong) February 8, 2023
SEC: Implementation Regulation
However, the SEC has other ideas and wants to treat PoS tokens in the same way as stocks – like securities.
The Coinbase CEO warned that the US should be a place where new technology and innovation is encouraged “and not stifled by a lack of clear regulations.”
“When it comes to financial services and web3, expanding these opportunities in the United States is a matter of national security.”
The SEC drives regulation through enforcement with ongoing crackdowns and lawsuits against crypto companies. It has not yet provided clear guidelines or a framework for fintech companies to operate under, and is instead scanning the industry for targets it could accuse of selling securities.
“Regulation through oversight doesn’t work,” Armstrong said, before adding, “It encourages companies to operate offshore, which is what happened with FTX.”
Last year, Paradigm issued a report saying that proof of stake does not constitute a “joint venture” as described in the Howey test that the SEC uses to determine what it considers a security. The report ended:
“When analyzing the economic realities of proving ETH on Ethereum’s Proof-of-Stake network, the court must find that stake does not meet the Howey test because there is no ‘joint venture’ and validators never rely on the ‘efforts of others’.”
Cardano’s founders have a dig
Cardano founder Charles Hoskinson took advantage of the opportunity to take on his rival rather than stand together for the benefit of the entire industry.
“A stake in Ethereum is a problem. Temporarily giving away your assets to someone else for a return is a lot like a regulated product.”
The SEC has hinted that ETH is a security due to its staking mechanism, but then the premise could apply to all PoS tokens if there is legislation.
The Coinbase CEO after worrying about the SEC’s crackdown on Crypto Staking ambitions appeared first on CryptoPotato.