Friday, September 30, 2022

SEC Investigating Coinbase’s Staking and Yield Products

The US Securities and Exchange Commission (SEC) is investigating the staking and yield products of crypto exchange Coinbase. Earlier, there was also information about the SEC taking action on the exchange regarding the listing of some assets. The SEC believes that these are not securities and have been listed incorrectly.

Coinbase has Told, “The SEC has sought documents and information from the firm regarding certain products. These include the process of listing of assets, classification of certain listed products, and yield-paying products.” Staking and yield are two ways in which many platforms allow their users to earn more from their holdings. These methods have become quite popular in the last few years. However, the scrutiny of regulators regarding these has also increased.

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Recently, Coinbase decided to reduce its workforce by 18 percent due to a major decline in the digital assets segment. The firm, which has its headquarters in the US, said that it has taken this step to cut costs in this difficult period of the industry. The decision is expected to result in layoffs of over 1,000 employees of the exchange. Brian Armstrong, the exchange’s chief executive officer, said in a blog post, “The difficult decision has been taken to reduce our team size by approximately 18 percent. This will ensure the firm’s position during economic slowdowns.” Taking the responsibility of hiring for the exchange, he said that a lot of people were recruited in the last few months and this is now affecting the efficiency of the firm.

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Exchange’s focus is on Web3 integration. A new feature was introduced a few months ago on Coinbase’s app for access to Ethereum-based dApps. With this, users will be able to access the non-fungible token (NFT) marketplace and decentralized exchanges (DEX) through this app.

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Decentralized apps (dApps) run on a blockchain network. To use these apps, users have to pay in cryptocurrency to the dApp developer instead of downloading them. These apps are not controlled by any one authority. The popularity of these apps is increasing among the Web3 community.

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