- Coinbase has shut down Algorand staking rewards for retail users after receiving a Wells notice from the SEC.
- ALGO trading will be available for all users while governance rewards will continue for institutional investors.
- The price of ALGO has tanked more than 6% since the suspension of its staking rewards.
Coinbase has shut down staking rewards for Algorand. The American crypto exchange reportedly took the decision in light of the Wells notice that was recently issued to it by the United States Securities and Exchange Commission (SEC). A Wells notice is a formal declaration of the securities regulator’s intent to initiate enforcement actions against a firm.
Staci Warden, the chief executive of the Algorand Foundation, took to Twitter earlier today to brief the community on the situation. According to Warden, Coinbase evaluated its services following the intensified regulatory scrutiny and decided to suspend Algo rewards for retail customers due.
Warden clarified that the American exchange will extend support to users who wish to participate in the governance process directly as individual governors. The crypto exchange will also continue to offer ALGO trading to all of its users, along with governance rewards for its institutional investors.
“There have been some questions about this, but no, they wouldn’t take your algos, lock them up in governance and keep the governance rewards themselves,” CEO Staci Warden assured Algorand users on Twitter. The rewards from the Algorand governance period ending March 31st will reportedly be paid out in early April.
News of the staking reward suspension led to a significant impact on the native token ALGO, which has tanked more than 6% over the past 24 hours. ALGO sank as low as $0.211 earlier today before recovering to $0.218 at the time of writing. The recent developments prompted opportunistic investors to trade the token, resulting in a 27% increase in its daily trading volume.
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