- August 21, 2022
“We would stop staking Ethereum if regulators threaten”: Coinbase CEO
Coinbase holds 14.1% of all ether (ETH) in staking.
If it were to close operations, Coinbase would lose more than 1.8 million ETH.
In the hypothetical case of the United States sanctioning Ethereum 2.0 staking platforms, Coinbase CEO Brian Armstrong would prefer to close operations rather than censor transactions of its users
His words were given as a response to Lefteris Karapetsas, founder of an app dedicated to the protection of the privacy of cryptocurrencies, Rotkiapp. He asked the 4 main staking platforms (Lido, Coinbase, Kraken and Binance), who control more than 60% of the ETH in staking, what they would do in a scenario like the one proposed.
At the time of this publication, the Coinbase CEO was the only one to respond. In your case, comment which is a hypothetical situation that you hope not to face, but that, if it happened, I would choose the option of abandoning the staking. Armstrong adds that, in this situation, he expects there to be a possible third option, rather than just two.
For the entrepreneur, it is necessary to “look at the big picture” in which your company and the Ethereum ecosystem subsist. Considering that Coinbase’s base of operations is located in the United States, it is obliged to comply with the mandates of this government.
It should be borne in mind that staking ETH will not be able to be withdrawn until mid-2023, when the stage known as sharding. This means that, if Coinbase decides to withdraw before this stage, you will lose about 1.8 million ETH. Recall that Ethereum protocol 2.0 penalizes validators who disconnect.
However, since it is a staking pool, the losses would not be directly from Coinbase, but from its customers, who are the ones who have really given their ETH to Coinbase so that it manages them.
Coinbase CEO vows not to censor transactions
Armstrong denies that his company is going to censor transactions coming from US-sanctioned addresses. UU.
His statement comes into special force with the recent case of the Tornado Cash mixer. Circle, creator of USD Coin (USDC), froze all address usdcs that had used this mixer. Others, such as Infura node providers, denied access to any wallet connected to one of their nodes to use Tornado Cash.