In a copy of the email shared by TheCryptoTengu.eth, Coinbase said that affected users could no longer stake additional funds effective immediately. The crypto exchange also said that it will unstake any funds, including any accrued rewards, staked by users after June 5. It said that it will deposit these funds in users’ main balances.
Coinbase said that users will nevertheless continue to earn rewards on any balance that remains staked, though these rewards will not be staked again. Users can also voluntarily ask for their rewards to be unstaked at any time, Coinbase said.
The email indicates that the Maryland Securities Commissioner issued a preliminary cease and desist order concerning Coinbase’s staking services on June 6. The agency also initiated a broader case against Coinbase alongside that order.
Coinbase noted that it took part in discussions with the Maryland Securities Division and said that it must now adapt its services as the case proceeds.
Coinbase said that it disagrees with Maryland’s stance on its staking services and noted that the order is not a final adjudication. Those statements imply that the crypto exchange could resume staking services in Maryland in the future.
Ten state securities agencies target Coinbase
Coinbase revealed in July that securities agencies in a total of ten states had initiated proceedings on June 6. Those states are Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin.
At the time of its July announcement, Coinbase restricted staking in four states — California, New Jersey, South Carolina, and Wisconsin. However, the measures that the company took at the time only prevented users in those states from staking additional assets. Coinbase’s response to Maryland, by contrast, also impacts existing staked funds.
The ten state-level actions also coincide with a broader case initiated by the U.S. Securities and Exchange Commission (SEC) on June 6, which in part concerns staking.