In a blog post on July 14, Coinbase announced that users in California, New Jersey, North Carolina, and Wisconsin will be restricted from using certain staking services until further notice. Following the U.S. Securities and Exchange Commission’s lawsuit against the cryptocurrency exchange in June for offering unregistered securities, regulatory agencies in 10 U.S. states have initiated their own legal procedures, resulting in the suspension of some services.
Coinbase said:
We strongly disagree with any allegations that our staking services are securities. However, we will fully comply with the preliminary orders from the states, even though they came before we had a chance to present our case.
This announcement comes after a hearing in the first-ever case brought by the SEC against Coinbase. The SEC filed the lawsuit on June 6, alleging that the cryptocurrency exchange had been operating as an unregistered securities broker since 2019. Coinbase has denied the majority of the allegations.