Algorand Foundation CEO Stacy Waden confirmed rumors of Coinbase's decision to terminate Algorand on Twitter, Offer incentives to retail customers. However, Coinbase and Algorand have different reasons for the move.
According to Waden’s tweet, Coinbase notified Algorand on March 22 of the abrupt termination of ALGO token rewards as the cryptocurrency exchange evaluated its portfolio of products and services following the SEC’s Wells notice that same day. Waden added in the post that the change will not affect ALGO token transactions and governance rewards for institutional investors.
Coinbase has denied these claims. “The Algorand news has nothing to do with this,” a spokesperson for the cryptocurrency exchange told Cointelegraph, asserting that the cessation of ALGO rewards has nothing to do with recent regulatory developments:
“Coinbase works with asset issuers to offer rewards and is constantly re-evaluating our product to ensure the best customer experience. We have decided to discontinue Algorand (ALGO) rewards at this time.” Coinbase is the latest cryptocurrency company to be targeted by U.S. regulators in 2023. After receiving Wells' notice on March 22, the exchange's chief legal officer, Paul Grewal, said the warning "comes after Coinbase provided the SEC with multiple reports over the course of several months, all of which the SEC ultimately refused to accept." respond."
Grewal further stated that Coinbase has “formally asked the SEC several times to engage in rulemaking in our industry.” This included filing a rulemaking petition in July, submitting a comment letter in support of the petition on March 20, and asking for clarification The SEC’s view on staking services and the failure to provide notice to the industry. According to Grewal: “Just two days later, we received a notice from Wells that included our pledge services the same pledge services that were cited 57 times in the S-1s that the SEC reviewed when we became a public company in 2021.”
The Wells Notice is a letter warning companies that the SEC may take enforcement action after discovering possible violations of securities laws. Despite the notice, the cryptocurrency exchange said its products and services "continue to operate as usual." The Coinbase notice comes less than two months after the SEC reached an agreement with cryptocurrency exchange Kraken for “failing to register offers and sales of its crypto asset collateralization-as-a-service program,” which the commission claims is within its purview under securities regulations. . As part of the settlement, Kraken agreed to cease operations of its U.S. pledge program and pay $30 million in disgorgement, advance interest and civil penalties.
