Another Exchange to Stop Ethereum Staking for US Customers
Ethereum staking will no longer be valid for Bitstamp US customers starting in September. It’s becoming more difficult for exchanges to offer staking services to American investors
Bitstamp to Stop Ethereum Staking
Bitstamp, one of the world’s most established cryptocurrency exchanges, announced it would halt Ethereum staking on the exchange. The service will officially be suspended on September 25.
Speaking of the news, CEO of Bitstamp USA, Bobby Zagotta, stated: “Customers will continue earning staking rewards up until September 25, 2023, and after that, all staked assets will be unstaked. Rewards, along with the principal, will be credited to users’ main Bitstamp account balances.”
Additionally, Bitstamp said that the staking rewards and the initial deposit amount would be distributed to the customer’s main account balance. It’s noteworthy that the process might take a few days and could be affected by the Internet connection.
Bitstamp’s move came amid intensified scrutiny by regulators on the crypto market. Major crypto exchanges with operations in the US have made specific actions to comply with the current regulatory landscape. Some of the most popular acts are to halt staking services and remove some trading pairs.
Coinbase recently decided to delist six tokens from its exchange due to its failure to meet its standards. These tokens, including BarnBridge (BOND), DerivaDAO (DDX), Jupiter (JUP), Multichain (MULTI), Ooki (OOKI), and Voyager (VGX), will no longer be available for trading starting on September 6. Furthermore, Coinbase Pro, Coinbase Exchange, and Coinbase Prime services for these tokens will also be discontinued.
Meanwhile, Binance also announced a series of delistings. In August, the exchange removed Sonm (SNM), Serum (SRM), and DFI.Money (YFII) from its platform earlier this week. The move affected the following trading pairs: SNM/BTC, SNM/BUSD, SRM/BUSD, and YFII/USDT
Earlier this month, Bitstsamp also halted trading for seven tokens in the US. All of these tokens are on the SEC’s list of unregistered securities, including Polygon (MATIC), Solana (SOL), and Near Protocol (NEAR). This action was taken to steer clear of any potential legal complications.
Crypto Staking Targeted
Bitstamp is not the only exchange that has to stop the staking service in the US under mounting regulatory pressure. In February, California-based exchange Kraken announced the suspension of its staking service in the US as part of the settlement with the SEC.
This move raised questions about whether the SEC plans to crack down on crypto staking more broadly.
Coinbase CEO Brian Armstrong said in February that there were speculations about the SEC’s possible ban on the crypto staking for retail customers in the US. Armstrong’s statement, however, lacked clarification regarding his assertion that the SEC’s ban only targets retail investors.
Armstrong additionally highlighted the advantages of staking in blockchain technology. Staking involves using assets to safeguard and maintain the blockchain while preserving its decentralized nature.
The CEO also argued that crypto staking is a vital part of blockchain technology and should not be banned. He has warned that banning crypto staking would harm the US’s technological leadership and could lead to exchanges moving their operations overseas.
The SEC has not yet taken any concrete action against crypto staking. However, the SEC Chairman Gary Gensler, since September 2022, has indicated that staking can be considered a form of security.
Consequently, staking operations must register with the SEC to offer services to American investors. The SEC Chairman previously asserted that most cryptocurrencies, excluding BItcoin, are securities.
Gensler’s remarks coincided with Ethereum, the second-largest cryptocurrency network globally, successfully implementing its major upgrade known as the Merge to support ETH staking. The Ethereum community is awaiting the next major event – the Dencun upgrade, which is expected to launch within the year.