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CoinDesk Consensus

According to the announcement, Coinbase has begun moving four cryptocurrency assets to on-chain staking. March 23rd.

4 assets impacted and 1 asset decommissioned

Coinbase’s announcement and accompanying help page state that under the new approach, customers will “get rewarded from the protocol, not from Coinbase.” The company says its sole role is to connect customers to relevant validators on the blockchain.

Coinbase will suspend staking and unstaking starting March 24th and will resume those features on March 29th. Users will continue to earn funds in the meantime.

This policy applies to four of the five assets that can be staked through Coinbase: Tezos (XTZ), Cosmos (ATOM), Solana (SOL), and Cardano (ADA).

This policy does not apply to Ethereum (ETH) staking, which is also supported by Coinbase. This is probably because Ethereum does not yet support wagering withdrawals and has high technical and deposit requirements for on-chain wagering.

Coinbase also said that Algorand (ALGO) staking will be discontinued on March 29. Nonetheless, the company will pay remaining ALGO staking rewards to users and continue to support ALGO trading on major exchanges.

Have regulations made a difference?

It is unclear if this action is related to Wells’ notice Coinbase received from securities regulators. A Coinbase statement today suggests that the change was scheduled as early as March 10. This was before I received that notification.

The change may have been affected by Coinbase’s February warning that the U.S. Securities and Exchange Commission (SEC) was planning to take action against its retail staking product. The SEC has since taken action against Kraken. This may have motivated Coinbase to introduce a staking service with a minimal role.

Algorand Foundation CEO Stacey Warden Coinbase said He told her they were reconsidering the service following regulatory scrutiny. Warden was apparently unaware of Coinbase’s Wells Notice until a commenter in her Twitter thread notified her of the development.

Elsewhere, Coinbase said in a statement to Cointelegraph that it has stopped staking Algorand for customer experience reasons.

By Jules

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