On Thursday, Coinbase CEO Brian Armstrong shared a Twitter post saying the US SEC had plots to do away with crypto staking. His Twitter thread sparked mixed reactions as the crypto community took it as a potential attack on the innovation.
Armstrong condemns SEC attack on crypto staking
In his Twitter thread, Armstrong said that they are hearing rumors the SEC would like to do away with crypto staking in the US. He said that the main target of such enforcement would be the retail investors and added that he hopes it’s not the case as it would be a terrible path for the US.
Armstrong expressed how staking is an important innovation in the crypto space, meaning it would be catastrophic if it were to be overlooked. He explained that it allows users to participate directly in open crypto networks. He stated that it brings different positive improvements to the industry, like scalability, security, and a lower carbon footprint. As such, he believes staking is not a security.
He said that the crypto community needs to ensure that technologies and innovations are encouraged and welcomed in the US and not smothered by a lack of clear rules. He added that if such financial and Web 3 tools were to be built outside the country, it could be a matter of national security.
Is regulation going to kill crypto?
In his thread, Armstrong said there are better ways out than regulation by enforcement. He said it encourages companies to operate offshore, like in the case of FTX, which could be a danger to the finance sector as they cannot be adequately monitored.
He added that he hoped all stakeholders could work together to develop clear rules governing the industry. He said such rules should be sensible solutions to protect consumers and preserve innovation and national security interests in the US.
His comments attracted mixed reactions. Cardano Co-Founder Charles Hoskinson responded and claimed that ETH staking is problematic. He explained that temporarily giving someone else your unregulated assets to help them get a return does not look good. He said a lack of good innovation that allows for staked money to be accessed and decentralized could end up lumping all betting together.