Coinbase Might Shut Down ETH Staking Service

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Key Takeaways:

  • Coinbase would end Ethereum staking if faced with regulatory threats, according to its CEO.
  • Coinbase would protect Ethereum’s integrity and stop staking services in response to the inquiry submitted by the CEO of Rotkiapp, a crypto accounting company, who goes by the handle @LefterisJP.

In response to a hypothetical example, Brian Armstrong, CEO of Coinbase, stated on Twitter today that his company will halt its Ethereum staking service in the case of regulatory concerns to protect the security of the blockchain network.

The Ethereum blockchain will ultimately transition to a Proof of Stake (PoS) system in less than a month. This suggests that ETH won’t be mined but instead staked.

The change aims to address some of the main problems plaguing the Ethereum network, such as scalability and excessive transaction costs.

Lefteris Karapetsas, the creator of the open-source crypto analytics and accounting tool Rotki, presented the query on Sunday. Karapetsas challenged several significant Ethereum players to pick between two choices if governmental authorities required that they censor particular addresses.

However, he added that there might be a legal route, in which case Coinbase would take on the government and attempt to achieve a better result for everyone.

One of the first crypto companies to debut on a stock exchange was Coinbase, a publicly traded company.

Owing to the ongoing bear market, Coinbase has been having trouble lately. Coinbase had to let go of a portion of its workforce, like many other cryptocurrency businesses, to weather the crypto cold.

Armstrong’s response is particularly noteworthy given that Coinbase considers its lucrative staking service to be a “huge win” for the business and is relying heavily on it for its future. And just last week, JPMorgan analysts wrote in a note that Coinbase and its shares (COIN) should benefit from the Ethereum merger due to the company’s Ethereum staking service.

Vitalik’s take on Ethereum Censorship:

Ethereum co-founder Vitalik Buterin said he wanted to punish validators for cooperating with the censorship demands by burning their stake tokens in a recent Twitter vote on Ethereum censorship.

Eric Wall, a software engineer, put the Ethereum community to the test by asking if they would burn the staked tokens of validators that abide by censorship orders or simply “endure the censorship” and take no action.

The former was chosen by 62% of voters, including Buterin. In the meantime, 29% clicked display results, and 9% chose to accept censorship. 

Wall created a poll about a tweet from Lefteris Karapetsas that questioned five important Proof-of-Stake validators if they would abide by censorship orders or respond by shutting down their staking service.

The cryptocurrency industry has trouble overcoming concerns about mixers like Tornado Cash and consecutive hacking incidents. To protect their population from financial risks, governments all across the world have strengthened their monitoring of the industry.

In this environment, authorities may express overly protective feelings towards Merge’s release, and cryptocurrency companies like Coinbase are already deciding how to handle various scenarios.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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