Responding to a hypothetical scenario on Twitter, Coinbase CEO Brian Armstrong said that the company would shut down its Ethereum staking services to preserve the blockchain network’s integrity, in the event of a regulatory crackdown.

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Fast facts

  • The hypothetical question was posted on Sunday by Lefteris Karapetsas, founder of Rotki, an open-source crypto analytics, and accounting app, tagging major companies like Coinbase, Kraken, Lido Finance, Staked, and Bitcoin Suisse.
  • Karapetsas asked the companies how they would respond if regulators would ask them to censor at the Ethereum protocol level with their validators, offering two possibilities: “A) Comply and censor at protocol level” or “B) Shut down the staking service and preserve network integrity.”
  • Armstrong responded on Thursday, writing: “It’s a hypothetical we hopefully won’t actually face. But if we did we’d go with B I think. Got to focus on the bigger picture.”
  • The Coinbase CEO further added that a third and better option may also present itself: “There may be some better option (C) or a legal challenge as well that could help reach a better outcome.”

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