Last Updated: 13 February 2023
In America, there is much to do about strike, the lending of cryptocurrencies in exchange for interest. US authorities such as the Securities & Exchange Commission (SEC) are targeting the central platforms that facilitate this service such as Coinbase and Kraken. These, however, are not letting up.
Brian Armstrong, CEO of listed Coinbase, even wants to take his strike service to court. In the eyes of Coinbase’s management, a strike product is not classifiable as a security under US (securities) laws.
Coinbase's staking services are not securities. We will happily defend this in court if needed.https://t.co/GtTOz77YV3
— Brian Armstrong (@brian_armstrong) February 12, 2023
Armstrong’s comments do not come out of the blue. Earlier, competitor Kraken settled a dispute with the SEC. The San Francisco-based exchange reached an agreement to pay a $30 million fine. Namely, they failed to register their “crypto asset strike-as-a-service programme” with the regulator. According to Jesse Powell, Kraken’s CEO, America would go in totally the wrong direction if it banned strike-as-a-service. He fears that other markets will then dominate those services.
According to Coinbase, their strike service looks “fundamentally different” from Kraken’s, nevertheless Coinbase’s shares fell by over 20% over the past week.
The drop prompted investor Cathie Wood of ARK Invest to purchase $9.2 million worth of COIN shares.
In the Netherlands, almost every exchange and broker also offers strike services, with a few exceptions. Dutch authorities are allowing these services for the time being, pending European rules to apply to crypto assets, which are currently unregulated, by 2024 or later.