Crypto exchange Coinbase has submitted a petition to the U.S. Securities and Exchange Commission (SEC) following the regulator's recent shutdown of the rival Kraken's staking service for U.S. customers.
The petition explains why staking cannot be universally considered securities.
The document, titled the Petition for Rulemaking, consists of 18 pages.
- In the petition, Coinbase argues staking is not a monolith concept, and some of the staking models do not involve the investment of money.
- The crypto exchange also underlined that every staking model does not include a joint enterprise between stakers and service providers, citing that users have full authority over their assets.
- Additionally, the petition pointed to several precedents from the past, particularly the 1973 Committee on Special Investment Advisory Services and the SEC's Regulation Fair Disclosure from 2000, to assist the SEC with its ongoing regulatory efforts on crypto staking.
- The company urged regulators to adopt a different approach toward staking services, reminding them of the economic consequences of their decisions on the digital asset ecosystem.
In February, the SEC forced crypto exchange Kraken to halt the operations of its crypto staking-as-a-service platform for U.S. customers and to pay a $30M fine to settle, citing that the platform offered unregistered securities.
- At the time, Coinbase said its staking programs were fundamentally different from Kraken's.
