Coinbase CEO says crypto exchange will abandon Ethereum staking if threatened by regulatory agencies.
The Ethereum blockchain will be fully migrated to the Proof of Stake (PoS) mechanism in less than a month. This means that Ethereum tokens will be staked and not mined.
The move is designed to address some of the major issues affecting the Ethereum network, including scalability and high transaction fees.
With the PoS mechanism, ETH holders can stake their coins on various crypto exchanges and platforms, giving them the opportunity to vote for node validators and have their own opinion on how the network operates.
Coinbase CEO Brian Armstrong responded to a hypothetical scenario regarding an Ethereum stake on Twitter today.
Armstrong said that Coinbase will shut down its Ethereum staking service in the event of regulatory threats. He added that Coinbase will do this to maintain the integrity of the blockchain network.
It’s a fiction that we won’t really encounter. But if we did I think we would go with B. The focus has to be on the big picture. There may also be some better option (c) or legal challenge which can help in reaching a better result.
— Brian Armstrong — barmstrong.eth (@brian_armstrong) 17 August 2022
However, he added that there may be a legal alternative where Coinbase will challenge the authorities and hope to reach a better outcome for all.
Coinbase is a publicly listed company and one of the first crypto companies to be listed on the stock exchange.
Coinbase has been struggling in recent quarters mainly due to the current bear market. Like many crypto companies, Coinbase had to lay off a certain percentage of its workforce so that it could survive the crypto winter.
Revenue for the San Francisco-based company declined 61% last quarter. Coinbase reported after-tax loss of $1.1 billion compared to a net profit of $1.6 billion it reported in the middle of the crypto boom last year.
However, the company said it has $6.2bn in available capital that would enable it to invest during the downturn.
The cryptocurrency market has been in a bearish trend over the past nine months, with most coins down more than 50% from their all-time highs.