Coinbase (COIN) has 28 days to explain to the Alabama Securities Commission (ASC) how its staking programme does not violate state securities laws, CoinDesk reported on Tuesday.
According to the ASC’s “show cause” order, Coinbase and its parent firm Coinbase Global violated the law by promoting the staking rewards programme “Earn” to residents, and the companies must demonstrate “why they should not be directed to cease and desist from selling unregistered securities in Alabama.”
The CoinDesk report added that as long as it complies with the law, the ASC action does not prevent Coinbase from offering staking as a service. However, the order was the product of a task force made up of ten state securities regulators from the United States, including Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin.