Coinbase suspends staking services in four US states following orders from regulators

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US-based cryptocurrency exchange Coinbase has announced that it will temporarily block customers from staking additional assets in four states amid legal proceedings brought by local regulators.

In a July 14 blog post, Coinbase said users in California, New Jersey, South Carolina, and Wisconsin would be banned from using certain staking services until further notice. Following the U.S. Securities and Exchange Commission’s June filing of a lawsuit against the crypto exchange for offering unregistered securities, regulators in 10 U.S. states have begun their own lawsuits , leading to the suspension of certain services.

We strongly disagree with any claims that our staking services are securities, Coinbase said. But we will fully comply with preliminary state orders if necessary, even if it comes before we have had a chance to defend ourselves.

According to Coinbase, only the actions of regulators in California, New Jersey, South Carolina and Wisconsin require a pause in staking additional assets. Users based in Alabama, Illinois, Kentucky, Maryland, Vermont, and Washington are eligible to stake crypto as they were before.

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The announcement follows the first pre-petition hearing in the SEC v. Coinbase case. The commission filed a lawsuit on June 6, alleging the cryptocurrency exchange had been operating as an unregistered security broker since 2019. Coinbase has largely denied all allegations.

State and federal regulators have sued other crypto firms for staking, claiming the services violated securities laws. In February, Kraken reached a $30 million settlement with the SEC asking it to stop offering staking services or programs to US customers.

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