Coinbase crackdown widens as US states push to halt staking product

Coinbase crackdown widens as US states push to halt staking product

State regulators from California to New Jersey demanded that Coinbase Global halt its staking service, posing fresh and local threats to the biggest US crypto exchange.

The moves by watchdogs across the country coincide with the Securities and Exchange Commission suing Coinbase on Tuesday for a range of alleged violations. Both federal and state officials drilled in on Coinbase’s staking program, which offers customers a return for letting their tokens be used to facilitate blockchain transactions.

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Over the past year, crypto staking products, which can be highly lucrative for platforms, have become a flashpoint in fights over how to regulate cryptocurrencies. Although it’s not uncommon for state regulators to coordinate, Tuesday’s action stands out because of Coinbase’s heft in the market.

“The cryptocurrency securities market is not a free-for-all where companies can make up their own rules,” Shirley Emehelu, New Jersey’s Executive Assistant Attorney General, said in a statement.

Multiple state regulators emphasized that their moves did not prohibit Coinbase from offering staking securities, so long as it complies with state law.

“Our message to Coinbase is: Come on in, and tell us why you should keep operating the staking products,” Amanda