Coinbase shares fell after SEC action against rival Kraken, and from prior comments from CEO Brian Armstrong on the dangers of restricting crypto staking.
Coinbase shares closed down 14% after an SEC action against rival exchange Kraken in connection with its staking program.
Coinbase shares have enjoyed a significant rally year-to-date, but remain down for the day, week, and since Coinbase's 2021 IPO.Brian Armstrong, co-founder and chief executive officer of Coinbase Inc., speaks during the Singapore Fintech Festival, in Singapore, on Friday, Nov. 4, 2022.shares closed down more than 14% Thursday, after CEO Brian Armstrong voiced concern on rumors that the Securities and Exchange Commission was mulling new enforcement action against crypto staking.
Coinbase has a staking service called Earn which currently offers 6% interest rates to customers. The company recorded $62 million in revenue from "blockchain rewards" for the three months ending on Sep. 30, 2022, about 10% of its $590.3 million in total revenue for that time period. It is a potentially lucrative revenue stream for Coinbase, which charges a staking commission ranging from 25-35% of the rewards that users gain by staking their crypto.
"We're hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that's not the case," Armstrong wrote on Wednesday night.
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