Coinbase Stakes Its Future as SEC Scrutiny Increases

• Coinbase reported a 12% drop in transaction volumes during Q4, with revenues down 57%.
• The exchange is trying to defend its staking program against the SEC’s scrutiny.
• Paul Grewal, Coinbase’s chief legal officer, has argued that the products are fundamentally different than those of Kraken.

Coinbase Reports Falling Q4 Revenue

Coinbase reported a 12% drop in transaction volumes during Q4 2020, resulting in an overall 57% decrease in revenue year-on-year. Despite this, subscription and service revenues increased 34%, giving investors some hope for the future.

SEC Scrutinizing Coinbase’s Staking Program

The U.S Securities and Exchange Commission (SEC) is currently investigating Coinbase’s staking program following Kraken’s $30 million fine for allegedly failing to register its own products. In order to avoid similar repercussions, Coinbase is attempting to prove that its offerings are fundamentally different than those of Kraken.

Paul Grewal Defends Staking Program

Coinbase’s chief legal officer Paul Grewal has argued that their staking product offerings differ from what was described in the SEC action against Kraken. He claims that users always retain ownership of their digital assets and have a “right to the return” from their staked coins; meaning Coinbase cannot unilaterally decide not to pay rewards after they have been earned.

Sam Bankman-Fried on FTX Acquisition Spree

Sam Bankman-Fried and his crypto derivatives exchange FTX have acquired yet another company recently: Blockfolio Signals. This new venture will allow users access to information on trading signals and cryptocurrency prices directly through their Blockfolio app, further expanding FTX’s already impressive portfolio of products and services.