Coinbase Updates Staking Service Terms Following Regulatory Crackdown

Coinbase has made changes to its staking service following a regulatory crackdown. Staking involves holding cryptocurrency in a wallet and receiving rewards for participating in network validation.

Coinbase has updated its terms and conditions for its staking service to emphasize that customers earn rewards via protocols and not from Coinbase itself. The biggest change is that users must now unstake certain assets before selling or transferring them. This brings Coinbase's service more in line with the kinds of staking services that exist on blockchain networks natively.

The assets that must now be unstaked on Coinbase are Solana (SOL), Cosmos (ATOM), Cardano (ADA) and Tezos (XTZ). Coinbase has cautioned that any asset staked on its platform may take a few hours or a few weeks before it can be unstaked and then moved or sold.

The changes were made after the U.S. Securities and Exchange Commission (SEC) fined another cryptocurrency exchange Kraken for allegedly violating securities laws with its staking product. The SEC ordered Kraken to halt its staking service for U.S. customers but the exchange will still offer staking services for non-U.S. clients through a separate Kraken subsidiary.

The SEC has warned that staking services may run afoul of federal securities laws in the U.S. if exchanges determine the returns their customers receive instead of strictly following the protocol.

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