Share this article
Coinbase's CEO Cites 'Rumors' the SEC May Ban Crypto Staking for Retail Customers
"I hope that's not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen," Brian Armstrong tweeted Wednesday.
Updated May 9, 2023, 4:07 a.m. Published Feb 8, 2023, 11:17 p.m.
Make us preferred on Google
Coinbase CEO Brian Armstrong says he's heard rumors the U.S. Securities and Exchange Commission would like to ban retail investors from engaging in cryptocurrency staking, the income-generating technique at the core of running blockchains including Ethereum.
"I hope that's not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen," he tweeted Wednesday.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
1/ We're hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that's not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.
— Brian Armstrong 🛡️ (@brian_armstrong) February 8, 2023
The SEC declined to comment.
While Armstrong's suspicions may come as a surprise to many in the industry, SEC Chairman Gary Gensler has previously stated that cryptocurrencies that allow staking could be classified as securities as defined by the Howey test – even though ether has been designated as a commodity by the SEC's sister regulator, the Commodity Futures Trading Commission (CFTC).
Read more: SEC Warns That Retirement Accounts’ Crypto Stakes May Be Unregistered Securities
After a congressional hearing in September 2022, Gensler told reporters that, while he wasn't referring to any token in particular, staking was "another indica that, under the Howey test, the investing public is anticipating profits based on the efforts of others."
A significant amount of money is staked. The value of staked assets was about $42 billion in the fourth quarter of 2022, with annualized staking rewards of $3 billion, according to a report from Staked, a noncustodial staking service provider. That figure was not limited to just retail investors.
Alison Mangiero, the executive director of the Proof of Stake Alliance (POSA) told CoinDesk that her organization opposes any assertion that staking constitutes an unregistered security.
"Staking tends to get misconstrued with unrelated activities like lending, but staking is fundamentally a way for anyone to join in providing security for proof-of-stake networks," Mangiero said. "The existence of staking service providers allows everyday Americans to participate in staking, which democratizes network consensus and validation and is core to the continued growth of the global decentralized internet. Any regulatory action that runs counter to this misunderstands the nature of staking, and hinders America's ongoing efforts to foster domestic technological innovation."
UPDATE (Feb. 8, 2023, 23:25 UTC): Adds that the SEC declined to comment, as well as additional context.
UPDATE (Feb. 9, 2023 03:47 UTC): Adds comment from POSA.
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Coinbase CEO says Big banks now view crypto as an ‘existential’ threat to their business
Brian Armstrong returns from World Economic Forum with message: traditional finance is taking crypto seriously
What to know:
- Coinbase CEO Brian Armstrong said a top executive at one of the world’s 10 largest banks told him crypto is now the bank’s “number one priority” and an “existential” issue.
- At Davos, Armstrong highlighted tokenization of assets and stablecoins as major themes, arguing they could broaden access to investments for billions while threatening to bypass traditional banks.
- He described the Trump administration as the most crypto-forward government globally, backing efforts like the CLARITY Act, and predicted that AI agents will increasingly use stablecoins for payments outside conventional banking rails.
Top Stories
