Coinbase has adjusted its staking services for Maryland residents in response to the state’s order.
In a significant development, the US cryptocurrency exchange Coinbase announced today via email that it is suspending its staking services in Maryland. This decision comes in response to a preliminary cease and desist order issued by the Maryland Securities Commissioner on June 6, 2023. The order challenges specific aspects of Coinbase’s staking services and marks the beginning of a legal case against the company.
According to the email, Coinbase has been in discussions with the Maryland Securities Division since the order's issuance. To comply with the legal directive, Coinbase is modifying its staking services for Maryland residents. Staking, which is crucial to cryptocurrency operations, allows holders to earn rewards by contributing to network security and operations. As a result of the recent developments, Maryland-based Coinbase users will experience immediate changes.
Starting Thursday, Maryland users will be unable to stake additional cryptocurrencies, as stated in the email. In the upcoming weeks, Coinbase will also unstake any crypto balances staked after June 5, including accrued rewards. This action directly responds to the restrictions imposed by Maryland authorities. Coinbase has assured users that all unstaked funds will remain in their primary balances.
Coinbase disagrees with the Maryland Securities Division’s interpretation of its retail staking services under state securities laws. The company emphasized that the Maryland order is a preliminary step in an ongoing legal case, not a final legal judgment. Committed to compliance, Coinbase plans to adhere to the order’s terms while defending its staking services in Maryland.
This legal challenge in Maryland represents a crucial moment for Coinbase. The company’s response and the eventual outcome could significantly impact the regulation of staking services under state securities laws. With legal proceedings underway, Coinbase is dedicated to keeping its Maryland customers informed and engaged.
As the case progresses, Coinbase customers in Maryland can expect several changes. They will continue to earn rewards on balances that remain staked, but these rewards will not be re-staked. Additionally, customers can unstake their assets at any time via the Earn tab on Coinbase, subject to standard unstaking periods.
