Personal wallets cannot participate in ETH staking and you know it. The first step is to transfer your ETH to a large scale, trusted wallet, like Coinbase's wallet.
What you own is an IOU from Coinbase saying they owe you the ETH at a future date. The value of this IOU is taxable of course. But the important thing is that if Coinbase goes bankrupt, it is an unsecured IOU / bond that is junior to Coinbase's other creditors.
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Just like how depositors into Celsius "owned" IOUs saying they had BTC or ETH or USDC in Celsius... it turns out that the value of those IOUs is worthless as the bankruptcy proceedings carried forward. Customer deposits, in the USA, are junior to investment banker's bonds that funded the business to begin with.
> The first step is to transfer your ETH to a large scale, trusted wallet, like Coinbase's wallet.
Absolutely FALSE. I don't know how you could possibly be so confidently wrong. One of the big selling points of PoS is that you don't need mining facility/hardware. You only need 32 ETH, and the resources to run the node. NO central entity is required.
"Solo staking on Ethereum is the gold standard for staking. It provides full participation rewards, improves the decentralization of the network, and never requires trusting anyone else with your funds."
Even if you move it to Coinbase for them to do the staking, the custodial wallet is in your name. The same happens with ETH held for trading. You can move it from one exchange to another, and still not trigger a taxable event as long as you own both accounts/wallets.
Personal wallets cannot participate in ETH staking and you know it. The first step is to transfer your ETH to a large scale, trusted wallet, like Coinbase's wallet.
What you own is an IOU from Coinbase saying they owe you the ETH at a future date. The value of this IOU is taxable of course. But the important thing is that if Coinbase goes bankrupt, it is an unsecured IOU / bond that is junior to Coinbase's other creditors.
-----
Just like how depositors into Celsius "owned" IOUs saying they had BTC or ETH or USDC in Celsius... it turns out that the value of those IOUs is worthless as the bankruptcy proceedings carried forward. Customer deposits, in the USA, are junior to investment banker's bonds that funded the business to begin with.