- State regulator claims Coinbase broke the law by offering the Earn program
- The exchange has 28 days to explain why it’s not
Some hours ago, the Securities and Exchange Commission filed a lawsuit against the crypto exchange Coinbase, and it is now under scrutiny from regulators. And the Alabama state regulator said the company was violating state securities laws with its steaking program.
In the order, the ASC writes that Coinbase Global and its subsidiary were offering Alabama residents rewards for steaking. The agency suggests that the exchange explain “why they are not encouraged to refuse to sell unregistered securities in Alabama.”
The Alabama Securities Commission ruling does not prohibit Coinbase from providing staking services as long as it complies with the law. The order was the result of a joint working group of ten U.S. state securities regulators, including Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin.
ASC Director, Amanda Senn, said:
“ASC aims to protect Alabama consumers and investors, including those who choose to invest their money in the decentralized financial sector. This move is intended to ensure that investors in cryptocurrency products have access to the same protections as those established by our laws, and that they are fully informed of the risks associated with such investments.”