Last week, Coinbase (COIN) erased a powerful rally that previously sent its stock up to over $80. COIN stock broke down below the $60 resistance level set in January. Fears re-emerged when Kraken, a notable crypto exchange, reached a deal with the SEC. Coinbase CEO Brian Armstrong’s caution also scared investors.
Kraken will shut down its crypto-staking platform. The platform allowed investors to earn a yield when they temporarily deposited their tokens with either an intermediary or a crypto network to facilitate blockchain transactions.
Kraken will pay $30 million to the SEC because it did not register the program.
Coinbase, Kraken’s rival, fell when the CEO speculated that the SEC may forbid crypto staking for all retail customers. In this series of tweets, CEO Armstrong said that staking plays an important role in running open crypto networks. He spoke against regulation by enforcement. He blamed it for letting FTX run offshore. Readers may infer that FTX operated without oversight, causing it to file for bankruptcy.
Coinbase reported $62 million in revenue from blockchain rewards in Q3/2022 or around 10% of its total revenue. The CEO’s warning for staking sets back the crypto industry and hurts Coinbase.
