A month after US regulators initiated a crackdown against staking products, Coinbase announced that the terms and conditions applicable to its staking services are now being updated.
The announcement
On Friday, the biggest crypto exchange in the US sent an email to its customers in which it said that it would continue offering staking services.
The exchange further said that clients would continue to earn rewards, but not via Coinbase, but through protocols.
This has become a point of contention amongst regulatory bodies in the US, such as the Securities and Exchange Commission (SEC).
The company announced that it only functions as a service provider that connects the users, the protocol and the validators.
It also added that a transparent Coinbase fee would also be charged. However, the biggest change being made is that users would have to unstake some assets before they transfer or sell them.
This would make the crypto exchange’s service similar to the staking services that can be found on native blockchain networks.
The changes
The assets that users would have to unstake on Coinbase include Cardano (ADA), Cosmos (ATOM), Solana (SOL) and Tezos (XTZ).
Up until now, users who held these coins on Coinbase could earn staking rewards without having to opt for the service.
They would be free to sell, or transfer the assets as per their preference, but this would now change. According to the exchange, now assets that are staked on the platform cannot be unstaked immediately.
It would take a few hours, or even weeks for them to be sold or transferred. The email said that this time was needed due to Coinbase’s processing time and rules of the protocol.
Regulatory crackdown
Coinbase is making updates to its terms after Kraken, another notable crypto exchange, was fined $30 million by the US SEC for its staking production, which was allegedly a violation of securities laws.
According to the regulatory agency, the exchange had not registered their staking service. It had also been ordered to stop its staking service in the US.
While Kraken agreed to pay the fine, it said it would use a subsidiary for offering its staking services to non-US clients.