Reality check: you can’t have regulated CEXs and unlimited choices too

If you firmly believe crypto should be totally unregulated, I respect that. This post is not about you. This one goes out to the hypocrites.

If you’ve ever advocated for the regulation of centralised exchanges and are concerned about the SEC’s ban on staking as a service, you’re a fool.

Setting aside for a moment that we all have plenty of reasons to be wary of any crypto-related moves from the SEC, this one is actually a step in the right direction.

Some people will say it limits your choices as an investor, and my reply is it’s a choice you shouldn’t have wanted in the first place.

CEXs are businesses. To profit, they will only offer a product or service because it benefits them. They are not doing anything out of the kindness of their own hearts. They do not care about your funds or making you money.

These staking services exploit you. CEXs take your funds, do what you can easily do yourself, and take profits off the top, with none of the risk. It’s also rumoured many are doing this with your funds on their platform anyway, whether or not you opted into the service to begin with.

The SEC decision finally goes some way in providing the consumer protection they’re supposed to fight for. CEXs have no accountability and no reason to protect your funds, so why leave them in their hands? How have we already forgotten the many lessons from last year?

The only way I would entertain staking as a service again is if the CEXs were subject to the same accountability and reporting requirements as stocks, aka, when they are regulated.

This is what so many of us have been asking for all along, albeit just a starting point. Keep the freedom of choice in decentralised finance. Regulate the CEXs to protect consumer assets. That’s the pathway to mainstream adoption - increased security, protection, and reliability for investors.