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Maryland hearing on staking highlights $9 million in missed rewards and clash over consumer protections
Summary
Supporters urged the Economic Matters Committee to clarify state law so Marylanders can access blockchain 'staking' services; industry witnesses cited an estimated $9 million in missed rewards, while securities regulators warned the bill could preempt investor protections and leave consumers without a regulator.
Delegate Adrien Baffo and backers of HB859 told the Economic Matters Committee on March 10 that Maryland law needs clear rules for staking services so residents can participate in blockchain networks and earn rewards. "By clarifying that staking as a service is not a security, this bill ensures that Maryland users can access these services and receive the rewards they are entitled to," sponsor Adrien Baffo said during the hearing.
Katie Anne, head of policy at Coinbase, said the company operates under multiple state and federal licenses and that 15% of Marylanders use crypto. "Maryland residents have missed out on more than $9 million in staking rewards on Coinbase's platform alone," Katie Anne said, urging lawmakers to avoid putting the state at an economic disadvantage. Entrepreneurs and local founders described staking as a pathway to jobs and new markets and warned that unclear rules have pushed founders to other states.
But state securities officials pushed back. Maryland Securities Commissioner Melanie Luben told the panel that staking done through enterprises that pool customer assets can meet the legal definition of an investment contract under state and federal securities law. "It's not illegal to stake in Maryland," Luben said, adding that the issue is whether firms comply with the Maryland Securities Act when they pool others' assets. She and Assistant Attorney General Max Brower warned HB859, as drafted, would preempt many existing enforcement tools and could leave consumers without clear recourse if an operator failed.
Credit unions and consumer advocates asked for clearer oversight language. Rory Murray of the Maryland‑DC Credit Union Association said the bill’s carveouts are "overly broad" and urged clarification of which state agency would exercise supervisory authority and what disclosure standards would apply.
The hearing included repeated exchanges over whether many neighboring jurisdictions already permit staking services and whether federal law will settle the classification. Sponsors said neighboring jurisdictions allow staking and that the state's current posture risks lost tax revenue and economic activity; regulators urged patience and proposed narrower, supervisory fixes. The committee heard the opposing views and noted amendments were being negotiated to clarify oversight and consumer protections.
The committee did not take a vote at the hearing; the next steps depend on subcommittee action and any amendments to specify regulatory authority and disclosure or registration conditions.
