• Brian Armstrong, CEO of Coinbase, sent shockwaves through the cryptocurrency markets with a tweet expressing his fears that the Securities and Exchange Commission (SEC) might be looking to crack down on crypto staking.
• Coinbase’s stock price tumbled in a free fall, dropping more than 14% and reaching its biggest-ever decline since July 2022.
• Armstrong’s tweet has caused a lot of uncertainty in the crypto industry as investors are now wondering what the future holds for crypto staking.

Brian Armstrong’s Tweet

Brian Armstrong, CEO of Coinbase, the largest cryptocurrency exchange in the US, sent shockwaves through the cryptocurrency markets with a single tweet voicing his fears that the Securities and Exchange Commission (SEC) might be looking to crack down on crypto staking.

Coinbase Stock Plunges

Armstrong’s tweet immediately affected the markets, with Coinbase’s stock price tumbling in a free fall. In one trading session, the stock dropped more than 14%, reaching $59.63 on Feb. 9, its biggest-ever decline since July 2022.

Uncertainty Spreads

The news has caused a lot of uncertainty in the crypto industry, and many investors are now wondering what the future holds for crypto staking. While SEC has yet to comment on Armstrong’s tweet, it remains to be seen how they will respond and how it will affect the crypto industry.

Potential Regulation by Enforcement

Armstrong added that regulation by enforcement would force companies to move offshore, leading to more FTX-like problems for the crypto industry if ETH was deemed a security after launching its staking feature.

Conclusion

The conversation about staking reached a fever pitch after Coinbase revealed in July 2022 that SEC had requested information about its services including its staking programs which could potentially deem cryptocurrencies that rely on staking as securities subject to agency’s oversight and disclosure rules making everyone worry about potential implications for digital assets going forward.