Coinbase Objects SEC: Core Staking Is Software Service, Not Security

• Coinbase explains to the SEC why core staking services are not securities offerings.
• The letter argued that staking services are mere software services.
• Coinbase CLO said the SEC could follow other paths without leading by enforcement.

On Tuesday, Paul Grewal, the Chief Legal Officer (CLO) of the Coinbase crypto exchange, announced that the firm had submitted a comment letter to the US Securities and Exchange Commission (SEC) explaining why core staking services are not securities offerings.

Grewal argued that core staking services are not an offering of securities but mere software services.  In his word, “paying someone a fee to take a chore off your hands doesn’t make something a securities transaction.”

Today, @Coinbase submitted a comment letter to our July 2022 SEC petition for rulemaking. We explain why core staking services–those that serve as a pass-through for rewards–are not securities offerings. https://t.co/Xzz21B9AkS 1/25

— paulgrewal.eth (@iampaulgrewal) March 21, 2023

Furthermore, the Coinbase CLO contended a statement issued by the SEC last month during the regulatory settlement of the Kraken crypto exchange. The statement read:…

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