Coinbase CEO: We’d Stop ETH Staking If Regulators Threaten

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Coinbase CEO We'd Stop Ethereum Staking If Regulators Threaten

Amidst the U.S. Treasury Department prohibiting coin mixer Tornado Cash earlier this month and the most waited Ethereum merge eagerly approaching, blockchain technologists are highly concerned that central regulations could make an impact on Ethereum’s fundamental operation and its post-merge proof-of-stake mechanism of consensus.

CEO of Coinbase, Brian Armstrong, reverted to a hypothetical scene on Twitter last day, saying that in the event of regulatory threats, his organisation would close down its staking service of Ethereum to conserve the ethics of the blockchain network.

On Sunday, the question was raised by Lefteris Karapetsas, founder of open-source crypto analytics and accounting app Rotki. Karapetsas tagged a bunch of crucial Ethereum players to challenge them to choose between two options if government regulators asked to censor specific addresses.

“Will you A) comply and censor at the protocol level [or] B) shut down the staking service and preserve network integrity,” he questioned in a tweet, tagging Coinbase, Staked, Kraken, Lido, and Bitcoin Suisse. On behalf of Coinbase, Armstrong is the only representative of one of the companies picked out in the scenario to reply as of this writing.

“It’s a hypothetical we hopefully won’t actually face,” Armstrong responded. “But if we did, we’d go with B, I think. Got to focus on the bigger picture.”

He pointed out that a better, third option could present itself or that a legal challenge “could help reach a better outcome.”

Armstrong’s response is particularly notable as Coinbase is betting a lot of its future on its profitable staking service, mentioning it as a “big win” for the organisation. And this week, JPMorgan analysts just said in a note that the Ethereum merge should bring a bullish effect for Coinbase and its shares (COIN), crediting to its Ethereum staking service.

“In early August, we began offering Ethereum staking for institutional clients for the first time,” Coinbase informed shareholders before a week.” We’ll continue to add more assets for staking for both our retail and institutional clients going forward.”

Alongside the merge, investors in Web3 and analysts are agitated that prominent, institutional players which offer Ethereum staking services are more likely to cave in pressure from government regulators. And because they control an outsized percentage of validators, their absence could menace the whole network.

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