Coinbase has halted access to its staking services in the US state of Maryland, according to an email sent to affected users on November 2.
In a copy of the email shared by TheCryptoTengu.eth, Coinbase said affected users could no longer stake additional funds effective immediately. The crypto exchange also said that it will release all funds, including accumulated rewards, staked by users after June 5. It said it would deposit these funds into users’ main balances.
Coinbase said users will still continue to earn rewards on any remaining staked balance, even though those rewards will no longer be staked. Users can also voluntarily request that their rewards not be staked at any time, Coinbase said.
The email states that the Maryland Securities Commissioner issued a preliminary cease and desist order regarding Coinbase staking services on June 6. The agency also launched a broader proceeding against Coinbase in conjunction with this order.
Coinbase said it had participated in discussions with the Maryland Securities Division and said it must now adapt its services as the case progresses.
Coinbase said it disagreed with Maryland’s position regarding its staking services and noted that the order was not a final decision. These statements imply that the crypto exchange may resume staking services in Maryland in the future.
Ten state securities agencies target Coinbase
Coinbase revealed in July that securities agencies in a total of ten states had initiated proceedings on June 6. These states are Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin.
At the time of its July announcement, Coinbase limited staking in four states: California, New Jersey, South Carolina, and Wisconsin. However, the company’s actions at the time only restricted users in those states from staking additional assets. On the other hand, Coinbase’s response to Maryland also impacts existing staked funds.
The ten state-level actions also coincide with a broader case initiated by the U.S. Securities and Exchange Commission (SEC) on June 6, which partly concerns staking.