I read about this possibility this morning. I wonder if this is just someone spreading misinformation regarding cryptocurrency, or if there is some truth to the rumor.

I read an article about this rumor: https://www.coindesk.com/business/2023/02/08/coinbases-ceo-cites-rumors-the-sec-may-ban-crypto-staking-for-retail-customers/

From what I understand, Ethereum is considered commodity even though it allows staking. The apparent issue at hand with the SEC is whether or not cryptocurrencies are commodities or securities. I have written about my thoughts on this in past posts here on this site.  I ask the question, if Ethereum is a commodity already, how can they argue all others are not unless they are playing favorites?

At issue seems to be the "Howey test."  it is fully described here: https://www.investopedia.com/terms/h/howey-test.asp The Howey test in short is a supreme court case that determines if a transaction is an "investment contract." Apparently, if it is determined an investment contract, then it is considered a security.  I am not a financial brain wizard, but how can staking be considered an investment contract? We "stake" financial resources all of the time with fiat currency and they are not considered a security.  I think they are fishing, but we will see.

I know the SEC and Ripple case is set to be concluded soon and will likely play a role in how bold the SEC gest with this type of determination.

If this happens, it will send the crypto market into panic and a significant drop in the market at least for the short term, if not for the long term.