Cryptocurrency exchange Bitstamp announced it would end Ethereum (ETH) staking services to its US customers as of September 25. The exchange cited the US regulatory environment as a deciding factor.
The Luxembourg-based cryptocurrency exchange Bitstamp announced it would end ETH staking services to its US customers on September 25. The exchange told Blockworks it would shutter staking services due to the US regulatory environment.
Bitstamp Cites Uncertain US Regulatory Environment
In a statement, Bitstamp US CEO Bobby Zagotta said:
“As a result, US customers will stop receiving staking rewards. All other Bitstamp services will remain unaffected.”
He continued to say,
“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. Typically, this process takes a few days but could be extended depending on network conditions.”
Zagotta explained the uncertain regulatory environment in the US motivated the exchange’s decision to discontinue staking services. He noted that “as one of the most regulated and trusted exchanges in the world, we have a comprehensive framework in place to continuously evaluate the services we support, taking into account the evolving regulatory environment in all jurisdictions in which we operate.”
Further stating:
“Considering current regulatory dynamics in the US, we’ve made the decision to discontinue staking for customers residing in the United States.”
Staking Controversy Continues
Staking services in the US have been a topic of considerable controversy recently. The US Securities and Exchange (SEC) came down on Kraken in February when it alleged the exchange failed to register its staking service as an unregistered offering. The SEC argued Kraken’s staking program was an unlawful offer and sale of securities. In a settlement, Kraken agreed to shutter its staking program.
The securities agency famously sued Coinbase in June, alleging it offered and sold unregistered securities through its staking service.
Under intensified pressure from the SEC, Bitstamp recently announced that it would suspend trading for several cryptocurrencies that the SEC identified as securities in its lawsuit against Coinbase and Binance. Bitstamp said:
“Update for our US users Starting August 29: AXS, CHZ, MANA, MATIC, NEAR, SAND, and SOL trading will be halted after evaluating recent market developments. Execute any open trades. Holding and withdrawing tokens afterwards will be unaffected.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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