A well-known cryptocurrency exchange platform called Bitstamp will stop offering its Ether staking service to all US customers as of next month.
Bitstamp announced that they would stop offering staking services to customers in the United States as of September 25, 2023. Bobby Zagotta, the firm’s global commercial chief and US CEO, confirmed this information. As a result of this announcement, Bitstamp’s US clients will not receive any more staking rewards going forward. All other Bitstamp services will remain unchanged.
With a complex regulatory environment prevailing in the United States, this course of action is emerging. Recently, staking services have been under scrutiny by the Securities and Exchange Commission (SEC), which asserted that such offerings could potentially be considered investment contracts, requiring registration as securities as a result.
The ever-changing regulatory environment has caused a shift in the crypto exchange industry. Earlier this year, Kraken, a renowned cryptocurrency platform, ceased its staking services for US-based users as part of their $30 million agreement with the SEC regarding accusations of providing unregistered securities. At the same time, The SEC initiated legal action against Coinbase – another big name in the crypto sector – accusing them of violating security laws concerning their prime brokerage, trading, and staking programs. Consequently, Coinbase decided to end offering staking services in multiple US states, including Wisconsin, California, South Carolina, and New Jersey.
Bobby Zagotta emphasized Bitstamp’s position that they have chosen to halt staking services for customers in the United States due to recent regulatory changes.
It is noteworthy that Bitstamp’s staking services for the US are only available for Ethereum (ETH), which carries a 15% fee on earnings earned by users.
According to Zagotta’s information about the transition process, clients can continue earning stake rewards until September 25, 2023, when all staked assets will be withdrawn. Users’ primary Bitstamp exchange account balances will reflect the rewards as well as the principal amount. The amount of time it requires to finish may take just a few days normally; however, depending on the condition of the network, it could require more time.
Earlier this month, Bitstamp stopped trading seven digital currencies in America. These tokens, which were recently labeled as unregistered securities by the SEC, consisted of Polygon, Solana, and Near Protocol.
Bitstamp’s move to end its staking program reflects the influence of regulations on the crypto industry. Exchanges have to make sure they abide by these laws while still providing reliable services for their customers. This action shows that Bitstamp is dedicated to upholding regulatory standards and remaining honest with its user base during this time of rapid change in the cryptosphere.