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Coinbase’s recent report reveals that residents in five U.S. states have collectively missed out on over $90 million in potential staking rewards since mid-2023.
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The exchange argues that these lingering bans are detrimental to consumers, limiting their options and exposing them to greater risk in the evolving crypto landscape.
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“The holdout states actively harm their consumers by barring their access to safe wealth generation tools like staking,” stated Coinbase’s chief legal officer Paul Grewal.
Coinbase reports that five U.S. states have hindered residents from earning $90 million in staking rewards since June 2023, urging state authorities to lift these restrictions.
Coinbase Pushes Back Against Outdated Staking Bans in U.S. States
On April 25, Coinbase publicly urged California, New Jersey, Maryland, Wisconsin, and South Carolina to lift their restrictions against its staking services. The exchange emphasized that removing these restrictions would bring these states in line with the Securities and Exchange Commission (SEC). Notably, several states have already abandoned similar efforts, showcasing a trend towards regulatory clarity.
The Impact of Legal Actions on Consumer Wealth
According to Coinbase, the financial ramifications for residents are significant. The ongoing legal actions have prevented users from accessing legitimate income opportunities from staking, exacerbating the issue of consumer wealth in a rapidly evolving financial landscape. “The missed earnings from these bans are not just figures; they represent real financial opportunities for everyday Americans,” Coinbase highlighted.
Shifting Consumer Risks and Regulatory Clarity
Coinbase argues that the holdout states have imposed outdated and misdirected bans initially designed to combat scams rather than legitimate financial services like staking. With the SEC lifting its enforcement action against Coinbase’s staking operations earlier this year, there’s a growing argument that states should follow suit. The exchange has expressed concerns that without lifting these restrictions, the barriers force consumers towards less secure, lightly regulated alternatives, further complicating the consumer landscape.
Call for Modernization of Crypto Regulations
Coinbase reiterates that these legal hurdles not only deprive consumers of competition and choice but also risk isolating these states from a modernized federal framework. “Continued litigation by the holdout states does not serve consumer protection; it only breeds confusion and invites greater risk,” Coinbase stated, urging state authorities to align with national efforts for clearer and more supportive crypto regulations.
Source: Coinbase
Conclusion
In summary, the impact of U.S. states retaining bans on staking services is palpable, resulting in over $90 million in lost potential earnings for residents. This standoff not only limits consumer options but also complicates the broader regulatory landscape. Coinbase remains steadfast in advocating for the removal of these restrictions, aiming to promote safer innovation and a stronger, more competitive crypto economy in the United States.
