• SEC is considering crypto staking regulations in the US.
• Charles Hoskinson, founder of Cardano (ADA) and IOG, has shared his opinion on the matter.
• He believes that one-size-fits-all regulation will not work when it comes to nuanced staking models.
SEC Plans to Regulate Crypto Staking
The U.S. Securities and Exchange Commission (SEC) is looking into regulating cryptocurrency staking services in the U.S., which has raised alarm bells across the crypto community. Coinbase CEO Brian Armstrong has claimed that this would be a “terrible path for the U.S.“
Charles Hoskinson’s Response
In response to this conversation, IOG and Cardano founder Charles Hoskinson shared a video discussing the possible staking regulations in the U.S., which has been a hot topic on Crypto Twitter this week. Hoskinson opines that it is an „inconvenience to the industry as a whole“ when regulatory bodies try to apply „one-size-fits-all“ interpretations to different staking mechanisms like Cardano versus Ethereum, because they are not cut from the same cloth.
Differences Between Proof of Stake Models
Hoskinson mentions that some of the many differences between Proof of Stake models include liquid or illiquid staking, custodial or non-custodial staking, and bonding and slashing mechanisms – all of which present their own risks for potential returns dependent on access to funds by regulated actors. This causes him concern about exchanges getting out of the staking business, as he wants stake pool operators and staking to be “distributed and decentralized” in order to reduce risk for U.S./global investors alike.
Possible Good News?
Hoskinson suggests that there are other consensus models with more sensible frameworks that could help fight against these regulations – keeping stake pools distributed and decentralized rather than being centralized by exchanges or other regulated actors who may take advantage of information asymmetries about returns etcetera for their own gain at investor expense..
It remains unclear how exactly SEC will regulate crypto staking services in US but Charles Hoskinson believes one size fits all approach might do more harm than good here given nuances involved with different proof of stake models like Ethereum or Cardano . Therefore he suggests better alternative solutions should be considered instead so as to keep stake pools distributed and decentralized rather than being centralized by exchanges etcetera .