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Washington State DFI joins nine other states issuing actions against Coinbase for violating securities laws

OLYMPIA – The Washington State Department of Financial Institutions (DFI) announced today that it has issued an action against Coinbase Global, Inc. and Coinbase, Inc. for violations of securities laws and corresponding penalties in connection with Coinbase’s staking rewards program.

The action is the result of a multi-state task force of ten state securities regulators led by California that also includes Alabama, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin.

“This action is another step towards ensuring that investors in digital asset products are also offered the protection of Washington’s securities laws,” DFI Division of Securities Director William Beatty. “We take seriously DFI’s mission to protect consumers by enforcing the securities laws.”

Staking occurs when investors lock their crypto assets for a set period to help support the operation of a blockchain. In return, the investor is promised more cryptocurrency. Under Coinbase’s staking rewards program, investors deposit crypto assets with Coinbase, which then facilitates the staking of these assets on the blockchain. The program is offered to the general public and advertises a return of up to 6% on investments. Coinbase pools investors’ crypto assets and employs a team of engineers to operate staking validator nodes to generate staking rewards. Coinbase takes a cut of those profits before sharing them with investors.

In today’s action, DFI determined that Coinbase offered its staking rewards program accounts to Washington State residents without first registering to offer or sell these securities with Washington DFI, in violation of state securities laws. This action does not prohibit Coinbase from offering a staking rewards program, so long as it complies with Washington’s securities laws. The purpose of registering an offer and sale of securities, in part, is to ensure that investors receive all material information needed to evaluate the risks of participating in an investment, including in a staking rewards program.

Coinbase’s nearly 3.5 million staking rewards program accounts nationwide are not insured by the Federal Deposit Insurance Corporation (FDIC), Securities Investor Protection Corporation (SIPC), or the National Credit Union Administration (NCUA). There is no protection from loss for any of these accounts, including the more than 111,000 accounts held by Washington investors.

“I appreciate the work of our Securities Division and the other members of the multi-state task force in bringing this important case,” DFI Director Charlie Clark said. “Washington State, along with other state financial regulators will not tolerate violation of state laws in place to protect investors.”

Investors are encouraged to contact DFI or to consult DFI’s securities registration database at to confirm the registration status of a staking rewards program before investing their money.

DFI expects any person offering securities in Washington to comply with Washington’s securities laws. If you are a client of Coinbase with complaints about your staking rewards program account, please file a complaint with the DFI at File Securities and Investment Complaints (

DFI acknowledges the SEC’s concurrent efforts to enforce securities laws and appreciates the inter-agency communication regarding this action.


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