Coinbase CEO Brian Armstrong has criticized rumored plans by the US Securities and Exchange Commission (SEC) to block retail investors from using cryptocurrency staking.
Staking has been gaining popularity and has helped a number of companies establish lucrative new sources of revenue.
Armstrong cautioned that a ban could make it impossible to develop Ethereum blockchains further. Staking is a core function of Ethereum and without it, he said the community would struggle.
In a series of tweets, Armstrong fleshed out his concerns about the rumored regulatory shift. He avoided commenting on the financial aspects of such a decision but drew attention to the fact that staking is important to innovation in the sector.
It helps users have a say in the running of crypto networks, which is precisely what the crypto ecosystem is trying to achieve, Armstrong argued.
He urged lawmakers to regulate the sector in a way that allows technology to grow and improve and avoid measures that will stifle innovation.
Armstrong went further and argued that financial services and web3 is a matter of national security. He said regulation by enforcement doesn’t work, as it just makes companies shift their operations offshore to the detriment of the economy and consumers.
“Hopefully we can work together to publish clear rules for the industry and come up with sensible solutions that protect consumers while preserving innovation and national security interests in the US”, he concluded.
Coinbase recently had to lay off 950 employees as part of restructuring amid a severe downturn in the value of cryptocurrencies.
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