Bitstamp to Stop ETH Staking In US Amid SEC Crackdown
One of the oldest crypto exchanges Bitstamp announced that it would discontinue ETH staking services for US customers starting September next month. The development comes amid the crackdown by the US Securities and Exchange Commission (SEC).
Crypto staking refers to the practice of earning rewards by committing tokens to support the operation of a blockchain. Ethereum started offering ETH staking in December 2020, much before the blockchain transitioned to a Proof-of-Stake (PoS) network. However, the SEC considers certain products related to staking as unregistered securities.
Bobby Zagotta, CEO of Bitstamp US, mentioned that customers will continue to receive staking rewards until September 25, 2023. After this date, all staked assets will be unstaked, and both rewards and principal will be added to users’ primary Bitstamp account balances. The usual duration for this procedure is a few days, though it might be extended based on network circumstances.
The company is closing its staking features because of the regulations in the US. Zagotta said that Bitstamp is a highly regulated and reliable exchange. They have a system in place to regularly check the services they offer and consider the changing rules in all the places they work.
“Considering current regulatory dynamics in the US, we’ve made the decision to discontinue staking for customers residing in the United States,” said Zagotta.
SEC Crackdown on Bitstamp and Crypto Staking
The US Securities and Exchange Commission has taken legal action against staking service providers in several cases. In lawsuits against both Coinbase and Binance, it argued that the staking programs can be considered investment contracts according to the Howey test.
In June, the agency filed a lawsuit against Coinbase Global Inc., alleging that the company violated its regulations by providing staking services. Crypto exchange Kraken previously halted its staking offerings in the US after announcing a $30 million settlement with the SEC to resolve similar allegations.
Earlier this month, Bitstamp announced a new fundraise with the goal of expanding its derivatives trading services in global markets.
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more… to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Delivered every day.
- Insights that move markets
- 100,000 active subscribers
- Elon Musk’s SpaceX Could File for IPO This Week, Tokenized Stock Falls
- Bitget Blends Crypto Trading With MotoGP Brazil Fan Experience Push
- ZachXBT Reports Russian OTC Broker Allegedly Laundered $4.7M+ in Crypto
- 3 Top Reasons Why Coinbase Stock is Sliding Today?
- Bernstein Says Bitcoin Has Bottomed Even as U.S.-Iran Peace Talks Remain Uncertain
- Dogecoin, Shiba Inu, and Pepe Coin Price Outlook as Markets Rise on U.S.–Iran Temporary Pause
- Bittensor (TAO) Price Soars 80% MoM Outperforming Bitcoin- Is It A Good Time to Buy?
- Top Factors Behind Shiba Inu (SHIB) Price Surging Today
- Gold Vs BTC: Bitcoin Outperforms Gold by 23% – Is $75K Next Amid Trump’s Five Day Pause
- Crypto Stocks to Watch As Trump Issues 48-Hour Iran Ultimatum- CRCL, COIN, and MSTR Price Analysis
- XRP Price Prediction Ahead of March 27 SEC Spot ETF Decision
