Brian Armstrong, chief executive officer of cryptocurrency exchange Coinbase, announced on his Twitter account on Monday, February 13 that the company is “gladly” taking its cryptocurrency stake service to court against claims of “securities.” will defend
According to Wallex and quoted by Forkast, the Coinbase exchange, which is traded on the Nasdaq stock market, is the largest centralized digital currency exchange in the United States of America. The company’s shares fell 2.5 percent to $57.09 on Friday.
Sharing a post written by Paul Grewal, Coinbase’s legal director, Armstrong added:
Coinbase staking services are not securities. We will gladly defend this matter in court.
In that article, Grewal noted that digital currency stakes are not recognized securities under US securities laws and the Securities and Exchange Commission’s (SEC) Howey Test.
According to him, staking services do not meet any of the components of the Howie test – investment of money, mutual investment, rational expectation of profit and effort of others – because these products are decentralized and not intended for investment, and users always retain ownership of their assets. It makes it out of the “investment” form.
Grewal added that applying securities laws to cryptocurrency stakes would prevent American consumers from accessing such services and drive them to foreign platforms that are not regulated by regulatory bodies.
Last week, the SEC fined Kraken exchange $30 million for failing to obtain a license for its cryptocurrency stake products. In response, Kraken announced on Thursday, February 9 that it was shutting down its staking service for US users.
The Securities and Exchange Commission is also trying to sue the publisher and issuer of the Binance Dollar (BUSD) stablecoin, Pexos Inc., as it also considers this token to be an unauthorized security.
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