Only the acts of regulators in California, New Jersey, South Carolina, and Wisconsin, claims the American cryptocurrency exchange, call for a halt to the staking of further assets.
The well-known cryptocurrency exchange based in the United States, Coinbase, has disclosed a temporary suspension of staking services for users in four states. Users in California, New Jersey, South Carolina, and Wisconsin will be prohibited from staking more assets until further notice due to ongoing legal procedures started by local regulators.
![Coinbase Staking Services Suspended in Four US States image 127](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/07/image-127.png?resize=918%2C451&ssl=1)
![Coinbase Staking Services Suspended in Four US States image 127](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/07/image-127.png?resize=918%2C451&ssl=1)
This ruling comes after Coinbase was accused of providing unregistered securities by the U.S. Securities and Exchange Commission, which spurred regulatory authorities in ten states to file their own lawsuits.
Related: Coinbase Faces SEC in Court: What Could Happen?
Compliance with State Orders Amid Disagreement
Even though Coinbase vehemently refutes claims that its staking services constitute securities, the exchange has pledged to fully abide by any preliminary state rulings, even before having the chance to mount a defense. Staking services will temporarily be suspended due to the regulatory changes made in California, New Jersey, South Carolina, and Wisconsin. Customers in Alabama, Illinois, Kentucky, Maryland, Vermont, and Washington are still able to stake virtual currency.
![Coinbase Staking Services Suspended in Four US States image 128](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/07/image-128.png?resize=877%2C598&ssl=1)
![Coinbase Staking Services Suspended in Four US States image 128](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/07/image-128.png?resize=877%2C598&ssl=1)
Pre-Motion Hearing and Regulatory Scrutiny
The first pre-motion hearing in the SEC’s complaint against Coinbase took place simultaneously with the news of the suspension of the staking service. The action, which was filed on June 6, claims that the exchange has been functioning as an unlicensed security broker since 2019. Coinbase has continuously refuted the accusations despite them.
The SEC reached a $30 million settlement with Kraken in February, compelling the exchange to stop providing staking services to U.S. clients. Other cryptocurrency companies that provide staking services have also come under regulatory scrutiny.
Customers in the impacted states are waiting for more information and the chance to restart their staking operations on the platform while Coinbase navigates the legal environment and modifies its services accordingly.
Related: Coinbase Shares Up 50% despite SEC Lawsuit