Ethereum staking. Is Coinbase out of the game?

What decisions of regulators should crypto industry representatives get ready for? What awaits the sphere soon, considering Ethereum’s transition to PoS? These are the questions crypto market participants and analysts are increasingly asking.

One of them is Lefteris Karapetsas, the creator of the Rotkiapp protocol. On his Twitter, he addressed key Ethereum players asking about their tactics in the face of strict demands from government agencies to censor transactions. 

According to Karapetsas, cryptocurrency platform management will have to choose one of two paths: to meet the requirements by implementing censorship at the protocol level or to stop staking ETH to preserve the integrity of the network.

The tweet has attracted many concerned users, a significant part of which is sure that such a decision of the state authorities is only a matter of time. 

Coinbase co-founder and CEO Brian Armstrong commented on a potential regulatory demand like this:

“It’s a hypothetical we hopefully won’t actually face. But if we did we’d go with B i think. Got to focus on the bigger picture. There may be some better option (C) or a legal challenge as well that could help reach a better outcome.” 

Staking is among Coinbase’s priority products. The platform plans to take a leading position in this area among all cryptocurrency organizations.

Ethereum staking is popular with both retail and institutional customers of the exchange. According to the company’s Q2 2022 financial report, non-investment products are chosen by 67% of users who make monthly transactions.

Coinbase’s near-term plans include the implementation of liquid staking using the Coinbase Wrapped Staked ETH (cbETH) derivative token. It will be issued on the security of Ethereum blocked in staking.