The reputable cryptocurrency exchange Bitstamp has announced that starting on September 25, 2023, it will end its ether staking program for all users situated in the United States. Bobby Zagotta, the CEO of Bitstamp’s U.S. operations and the company’s global Chief Commercial Officer, made it clear that U.S. users would no longer receive staking rewards in a formal statement made available to The Block. It’s crucial to remember that none of Bitstamp’s other services will be affected by this change and will operate as usual.
Regulatory Environment and SEC Review
The decision to stop supplying ether staking services in the United States was made in reaction to the difficult regulatory environment that surrounds cryptocurrency-related businesses. Lately, U.S. Staking services have come under increased scrutiny from the Securities and Exchange Commission (SEC), which has classified them as investment contracts and as a result subject to securities laws. This stance has caused several crypto businesses to review their business practices.
For instance, as part of a $30 million settlement with the SEC brought on by an alleged unregistered securities offering, Kraken, another well-known cryptocurrency exchange, stopped selling its staking service to customers in the United States. Additionally, the SEC has filed a lawsuit against Coinbase, claiming that the company’s prime brokerage, exchange, and staking programs break the law regarding securities. As a result, Coinbase took action to halt staking services in particular.
Bitstamp’s Wise Choice
The decision by Bitstamp to stop offering staking services in the United States is a proactive response to the changing regulatory dynamics. The decision, according to Zagotta, was informed by the nation’s existing regulatory landscape. For U.S. clients only, Bitstamp offered ether (ETH) staking services. A 15% charge was added to all rewards received. Customers can continue to accrue staking incentives until September 25, 2023, according to Zagotta. All staked assets will become unstacked after this date. Users can anticipate that their principal and rewards will be added to their main Bitstamp account balances. Although this procedure usually takes a few days, the time frame could be increased depending on the state of the network.
Further Trading Pauses
Notably, Bitstamp has stopped offering staking services and shut down trading for seven coins in the United States. Bitstamp’s decision reflects the challenging interplay between the evolving regulatory environment and the cryptocurrency industry, with staking services being the latest focal point of regulatory scrutiny. These tokens, including Polygon, Solana, and Near Protocol, were deemed unregistered securities by the SEC.
