Under the new terms, Coinbase clearly explains that users earn rewards from the decentralized protocols, not directly from the exchange itself

In spite of the recent clampdown by the US Securities and Exchange Commission (SEC) on staking services provided by centralized providers, Coinbase has restated to customers that its staking services will continue and ‘may actually rise.’

In a new customer email, underlined by a popular trader, AltcoinPsycho, via Twitter on March 10, Coinbase outlined its updated staking terms and conditions beginning from March 29.

Under the new terms, Coinbase clearly states that users earn rewards from the decentralized protocols, not directly from the exchange itself.

Coinbase acts only as a service provider connecting you, the validators and the protocol, as opposed to offering a share of its own staking rewards, the email reads, further saying that: Your staked assets will continue earning rewards. If you want to continue staking, no action is required. Your staking rewards may actually increase.

While the concept of Coinbase’s staking rewards continuing and possibly rising may annoy the Securities and Exchange Commission, the clear difference about protocol rewards and service provision seeks to avoid any gray area matters, such as those lately faced by competing exchange Kraken.

As reported by Cointelegraph, Kraken agreed to pay a $30m settlement on February 9 for supposedly failing to register its staking-as-a-service program with the Securities and Exchange Commission. As part of the deal, Kraken cannot offer staking services in the US anymore.

A major aspect of the Securities and Exchange Commission’s objection was that users lost control of their tokens when using Kraken’s staking program. Investors were offered oversized returns untethered to any economic realities, with Kraken also able to pay ‘no returns at all.’

Coinbase has reasoned that its staking services are basically different from Kraken’s. Chief Executive Officer Brian Armstrong stated on February 10 that the company would happily defend its position in court ‘if needed.’