Cryptocurrency trading Coinbase executives are defending the company’s cryptocurrency staking services, arguing that they cannot be classified as a security and threatening to take the issue to court in the United States.

Coinbase CEO Brian Armstrong said on Twitter that the company is prepared to “fight this in court if necessary.” The decision to take this action comes after cryptocurrency exchange Kraken reached an agreement with the Securities and Exchange Commission on February 10 to stop providing engagement services or programs to clients in the United States.

According to the Securities and Exchange Commission (SEC), Kraken did not “register the offering and sale of its staking program as a crypto asset service,” which the SEC has determined to be a security. Kraken agreed to pay $30 million in repayment, pre-judgment interest, and civil penalties, as well as terminate its services, as part of the settlement.

In a recent blog post, Coinbase’s chief legal officer Paul Grewal expressed his opinion on the matter. He said that “staking is not a security under the US Securities Law, nor under the Howey test.” Grewal went on to say: “Trying to superimpose securities law on a process like staking does not help consumers in any way and instead imposes unnecessarily aggressive mandates that will prevent American consumers from accessing basic cryptocurrency services and push users to unregulated offshore platforms”.

Grewal argues that gambling does not meet the requirements of the Howey test, which requires a commitment of money, participation in a common enterprise, a reasonable expectation of rewards, and the help of others. As he stated, “The Howey test originates from a 1946 Supreme Court decision, and a different conversation needs to be held about whether or not that test makes sense for today’s staples like cryptocurrencies”.