In the event of regulatory threats, Coinbase CEO Brian Armstrong says his company would shut down its Ethereum staking service to preserve the integrity of the blockchain network. This comes in the backdrop of concerns raised by blockchain technologists about government regulations’ potential to impact the operation of Ethereum and its post-merge proof-of-stake (Pos) consensus mechanism.
Lefteris Karapetsas, the founder of Rotki, had tweeted a question on Sunday and tagged several major Ethereum players. He had prompted them to choose between two options if government regulators demanded that they censor specific addresses. Karapetsas asked whether they will comply and censor at the protocol level, or shut down the staking service and preserve network integrity.
Armstrong replied that it’s hypothetical and hopefully, they will not face such a situation. However, he said they would go with the second option as they have to focus on the bigger picture. Armstrong shared that a better third option could present itself, or a legal challenge could help reach a better outcome. It should be noted that Armstrong’s Coinbase is very ambitious about its lucrative staking service. He has called it a big win for the crypto exchange. JP Morgan analysts had also said the Ethereum merge should be bullish for Coinbase and its shares (COIN).
About a week ago, Coinbase told its shareholders that the company began offering Ethereum staking for institutional clients for the first time. It will continue to add more assets for staking for retail and institutional clients going forward.
