- Coinbase said on Tuesday that it had suspended ETH staking reward withdrawals.
- The exchange said that the reason for the halt was a “technical issue.”
- The U.S. SEC is likely to file an enforcement action against Coinbase in the coming weeks.
The current crypto bear market is one of the toughest in history. It’s especially tough for centralized crypto exchanges, which have seen tremendous regulatory pressures.
The environment is so fragile that centralized exchanges face scrutiny for everything they do. For example, Coinbase has just suspended ETH staking reward withdrawals amid its beef with the SEC.
Coinbase Halts ETH Staking Reward Withdrawals
Coinbase, the second-largest centralized crypto exchange in the world, announced on Tuesday that it had suspended ETH staking reward withdrawals.
The exchange said the halt was due to a “technical issue” the team had already identified. A fix will be deployed in the next 48-72 hours, and ETH staking reward withdrawals will be re-enabled.
It’s unclear what bug Coinbase is referring to. Moreover, bugs that prevent regular activity are usually solved as soon as possible. In Coinbase’s case, it will take up to three days.
While it’s most likely that Coinbase is indeed experiencing a bug, it’s also possible that the exchange is preparing for potential regulatory action from the U.S. Securities and Exchange Commission (SEC).
Can SEC Be Blamed for Halt?
Coinbase received a Wells Notice from the SEC in March. Receiving a Wells Notice means the regulatory body plans to file an enforcement action against the receiver.
On Tuesday, Berenberg Capital Markets, a broker-dealer in the U.S., said that the SEC will likely file an enforcement action in the coming weeks. The enforcement action will probably be related to Coinbase’s staking services.
This is because other centralized exchanges like Kraken have already been ordered to shut down their staking services for selling unregistered securities.
However, if Coinbase received such an order, the exchange pledged to go to court and fight back.
On the Flipside
- The technical issues Coinbase is talking about might as well be actual technical issues that have nothing to do with upcoming SEC action.
Why You Should Care
Coinbase is the second-largest crypto exchange in the world. However, users should always be aware of potential issues centralized exchanges might face and consider self-custody.
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