The SEC isn't coming after Staking they're coming after Staking as a Service. Companies like Coinbase want to get you scared and angry because it will hurt them not you.

Staking as a Service is when exchanges or other 3rd parties take your crypto and stake it on your behalf. They take a commission and award you a cut or your staking profits. This is incredibly attractive to a CEX as it essentially allows them to generate yield with no risk to themselves by using the funds of users to stake.

^Edit2:

Staking as a Service is a great thing for Coinbase, so much so - they automatically stake your eligible assets in order to earn yield, without you having to do anything.

https://help.coinbase.com/en/coinbase/trading-and-funding/coinbase-earn/rewards#how-do-i-earn-rewards-on-coinbase?

^{End of Edit 2.}

On the surface this seems incredibly simple and easy to understand, but it can go wrong in a lot of ways. If it does these exchanges are often not responsible to restore any lost funds of their users.

• The company could take your Crypto and not stake it and try to generate yield in other ways.
  • They could lend it out to someone else. (FTX), (Gemini Earn), (Celsius)
  • They could trade against the market with it. (FTX),
  • They could Co-Mingle it with their own funds and use it for their business. (FTX)

The SEC created a video that briefly describes the potential problems above that could arise from staking as a service.

-----------------------

The SEC is coming after companies that offer staking as a service and forcing them to provide important disclosures to their clients and provide more consumer protections. They are not coming after Staking, just companies that profit off of users funds via Staking as a Service. This is scary for Coinbase as per the Coinbase TOS they receive a commission out of your yield.

Unless otherwise specified, the “staking rewards rate” disclosed by Coinbase for a particular Supported Digital Asset is an annualized historical rate based on the staking rewards generated by Coinbase in providing staking services to Coinbase customers for that Supported Digital Asset, minus our commission. This rate is an estimate and may change over time.

----------------------

Yes this is especially rough for users with staked ETH as it requires 32 ETH nearly $50K to stake - that makes staking at an Exchange with any amount of ETH incredibly attractive. However there are decentralized options like Rocket Pool to stake your ETH that doesn't require such a large upfront cost.

^{EDIT: It's not clear if a Decentralized option like Rocket Pool could be targeted later, that would be a huge hit to ETH Staking if that hypothetical happened.}

The biggest hurt will be directed at exchanges who up to now have been profiting off of their users funds with no risk to themselves. Staking isn't under attack by the SEC, just Staking as a Service. This SEC action will ironically help to make Crypto more decentralized as it forces staked crypto out of CEX in order for users to continue earning rewards.

-----------------------

TLDR: Staking as a service is under the scope of the SEC, it doesn't hurt anyone "unless you're Brian Armstrong the CEO of Coinbase and up to now your company has been making lots of money off your users funds with no oversight or protections - and no risk to your own funds". Taking away staking from exchanges is actually good for decentralization as it will force crypto out of CEX's in order to continue earning rewards.