Coinbase, a major cryptocurrency firm, has initiated a lobbying effort in Maryland to challenge a state order restricting its staking rewards program. The campaign targets legislation to overturn the attorney general's cease-and-desist directive from 2023. Officials say the company has engaged with numerous lawmakers to secure support.
Coinbase, which operates in more than 100 countries and manages $425 billion in assets, launched a lobbying campaign in Maryland to counter an order by Attorney General Anthony Brown. The order, issued in 2023 by the attorney general's securities division, prohibits the company from offering staking services, which Brown claims violate securities laws.
Staking allows digital asset holders to earn passive income, similar to interest or dividends. In the process, customers temporarily freeze some of their assets, which Coinbase uses to validate blockchain transactions. Participants then receive rewards for contributing to the network's security and operations.
Company officials stated that Coinbase has met with dozens of Maryland state lawmakers to seek sponsors for new legislation. This proposed measure would codify the staking program, effectively nullifying the cease-and-desist order and allowing the rewards program to continue legally.
The campaign underscores ongoing tensions between cryptocurrency firms and regulators over how digital assets should be classified and overseen. Maryland's actions reflect broader national debates on securities regulations in the crypto sector.