Coinbase’s CEO says the crypto exchange will abandon Ethereum staking if threatened by regulatory agencies.
The Ethereum blockchain will fully migrate to a Proof of Stake (PoS) mechanism in less than a month. This implies that Ethereum tokens will be staked and not mined.
The move is designed to solve some of the key issues affecting the Ethereum network, including scalability and high transaction fees.
With the PoS mechanism, ETH holders can stake their coins on various crypto exchanges and platforms, granting them the opportunity to vote for node validators and have a say in how the network operates.
Coinbase CEO Brian Armstrong responded to a hypothetical scenario on Twitter today regarding Ethereum staking.
Armstrong stated that in the event of regulatory threats, Coinbase would shut down its Ethereum staking service. He added that Coinbase would do so in order to preserve the integrity of the blockchain network.
It’s a hypothetical we hopefully won’t actually face. But if we did we’d go with B i think. Got to focus on the bigger picture. There may be some better option (C) or a legal challenge as well that could help reach a better outcome.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) August 17, 2022
However, he added that there could be a legal option where Coinbase will challenge the authorities and hope to reach a better outcome for everyone.
Coinbase is a publicly listed company and one of the first crypto companies to get listed on a stock exchange.
Coinbase has been struggling in recent quarters, largely due to the ongoing bear market. Like several crypto companies, Coinbase had to lay off a certain percentage of its staff to enable it to survive the crypto winter.
The San Francisco-founded company’s revenue declined by 61% in the last quarter. Coinbase reported an after-tax loss of $1.1bn, compared with the $1.6bn net profit it registered in the middle of the crypto boom last year.
However, the company said it’s $6.2bn in available capital would enable it to keep investing through the downturn.
The cryptocurrency market has been in a bearish trend over the past nine months, with most coins down by more than 50% from their all-time highs.