Bitstamp ETH Staking to Discontinue in the US
Bitstamp discontinues Ethereum staking for US clients due to SEC scrutiny. Other services unaffected. Kraken faced similar SEC settlement.
Bitstamp, a leading cryptocurrency exchange, was pressured to discontinue Ethereum (ETH) staking services for its US clientele.
Bitstamp, a prominent figure in the cryptocurrency trading world, recently caught the attention of many with its announcement to cease Ethereum (ETH) staking services for its customers in the United States. This change is set to take effect from September 25, 2023. Bobby Zagotta, who holds the dual roles of US CEO and global chief commercial officer at Bitstamp, was at the forefront of this announcement. He clarified that while the staking services for Ethereum would come to a halt, all other services and features provided by Bitstamp would continue to operate without any disruption for their global user base.
This significant shift in Bitstamp's service offerings directly responds to the heightened attention and scrutiny from the U.S. Securities and Exchange Commission (SEC) on the broader crypto-staking mechanisms. The SEC has been vocal about its reservations, hinting that such staking services could fall under the category of investment contracts. If this were to be the case, it would mean that these staking services would need to undergo registration as securities. This would introduce a new set of regulatory requirements, making the operational landscape more intricate for cryptocurrency platforms.
Bitstamp Staking Service
However, it's essential to note that Bitstamp isn't the sole entity under the SEC's watchful eye when it comes to staking services. The SEC has shown a consistent and proactive stance in understanding and regulating staking services across the board. A notable instance from earlier this year involves Kraken, a well-established cryptocurrency exchange. Kraken decided to suspend its staking services for its US user base. This move was not just a strategic decision but was a result of a hefty $30 million settlement with the SEC. The core issue revolved around allegations that Kraken was involved in offering unregistered securities.
Similarly, Coinbase Global Inc., a titan in the cryptocurrency industry, hasn't been immune to the SEC's rigorous evaluations. The SEC raised concerns over multiple services provided by Coinbase, with a particular focus on its staking initiatives. They believed that some of these services might be in violation of existing securities regulations. Acting on these concerns, Coinbase took the step to suspend its staking services in several U.S. states, with California, New Jersey, South Carolina, and Wisconsin being among them.
Bitstamp's decision to halt ETH staking in the U.S. is reflective of a broader trend in the crypto industry. Exchanges are increasingly finding themselves at crossroads, having to balance their commitment to offering innovative services with the need to remain compliant with evolving regulations.
Earlier in August, Bitstamp announced the discontinuation of at least seven alternative cryptocurrencies for its U.S. customers. This list included popular tokens like Axie Infinity, Chiliz, Decentraland, Polygon, Near, The Sandbox, and Solana.