By James Davis
As United States regulators attempt to take control over the crypto industry following the recent downfalls of multiple firms that have left investors in losses, rumors going around suggest that crypto staking could be the next target.
Brian Armstrong, co-founder and CEO of Coinbase exchange, took to Twitter on Wednesday afternoon to report that he heard rumors concerning Securities and Exchange Commission (SEC) plans to restrict Americans from crypto staking. Armstrong suggested that it would be a terrible move for the US if that’s the case.
In simple terms, crypto staking involves users depositing Proof-of-Stake (PoS) tokens into a blockchain in order to secure the network. In return, these stakers receive rewards. The PoS mechanism is considered environmental-friendly compared to Proof-of-Work (PoW), which is energy-intensive.
Since last November, after FTX’s collapse, the SEC has prioritized bringing sanity to the crypto industry. The Commission recently announced that it was examining all firms employing blockchain technology to ensure that they comply with the stipulated laws and service investors’ accounts efficiently.
For months, some Senators and crypto players have accused SEC’s Chairman Gary Gensler and his team of ‘regulation by enforcement’. Armstrong says this would likely push many crypto firms to exit the US market. However, Senator Warren believes SEC is doing a good job and that firms are scared of tougher policies.
Coinbase CEO Asks US Government to Encourage New Technology
Armstrong urged the US government to promote the growth of new technologies by developing clear rules. The country’s Representatives are yet to establish a comprehensive regulatory framework that would help regulators manage the crypto industry more effectively.
Just a few hours after Armstrong had posted his long thread, his crypto exchange wrote on its official Twitter account that staking could be a key driver in accelerating digital payments adoption since it does not depend on setting up costly centralized brokers.
Tezos Users Sues IRS for Taxing Their Staking Earnings
Meanwhile, a Tennesse couple has sued the Internal Revenue Service (IRS) in an effort to recover income taxes that the agency levied on the couple’s stake-generated Tezos two years ago. IRS has been insisting that the couple’s earnings from staking are taxable.