There is a slew of ongoing and upcoming milestone events for the historical events in the crypto sector. The awaited release of Merge, for example, is being met with many speculations on how it will affect market sentiment in the coming days and how it will be viewed under regulatory scanner. Coinbase CEO Brian Armstrong has explicitly stated that the company will shut down Ethereum staking services in order to preserve the integrity of the blockchain if any regulatory threats begin to shadow Ethereum’s post-merger operations.
Ethereum’s eco-friendly merge update will shift its mining model from a power-intensive proof-of-work (PoW) to an energy efficient proof-of-stake (PoS) model, reducing the energy requirement of the blockchain by 99.95 percent. The launch of Merge is scheduled for September, sparking intense discussions on social media.
Coinbase chief Armstrong revealed his company’s plans while responding to one such Twitter conversation, which included the question, “If regulators ask you to censor your validators at the Ethereum protocol level, would you? Will comply and censor at the protocol level, or shut down the staking service and preserve network integrity?”
In response to this question posted by the head of the RotKeep crypto accounting firm known as @LefterisJP, Armstrong stated that Coinbase will maintain the integrity of Ethereum and will stop staking services.
It’s a fiction that we won’t really encounter. But if we did I think we would go with B. The focus has to be on the big picture. There may also be some better option (c) or legal challenge which can help in reaching a better result.
— Brian Armstrong — barmstrong.eth (@brian_armstrong) 17 August 2022
Once Ethereum transitions to a PoS mining model, more people will be able to join the network as its transaction validators. Interested people must lock a certain amount of ETH tokens on the blockchain to become validators and perform the task of storing data, processing transactions, and adding new blocks to the network in exchange for rewards.
Developers are running extensive tests on improvements to Ethereum as DeFi apps reportedly worth over $100 billion (about Rs 7,61,110 crore) are backed on the blockchain, and cannot be put at risk.
For now, the crypto sector is struggling to shrug off inquiries about mixers such as Tornado Cash and back-to-back hack attacks. Governments around the world have put a lot of scrutiny into this area to protect their citizens from financial risks.
Against this backdrop, the release of Merge may be met with over-protective sentiments from lawmakers and crypto firms like Coinbase are already thinking about how to go about the situations.