Amid the changing landscape of cryptocurrency regulations in the US, Bitstamp, one of the industry's oldest digital asset exchanges, is making a significant move by discontinuing its Ethereum (ETH) staking services for customers based in the US. This decision comes as a result of heightened regulatory dynamics in the country, particularly concerning crypto-staking services.
Starting September 25, 2023, the exchange said that US-based users will no longer have access to staking their ETH on the platform. Before the deadline, users can continue to earn staking rewards, with these rewards and principal amounts eventually being credited to users' primary Bitstamp account balances. However, these changes might take a few days to be fully reflected in users' accounts.
Bitstamp Faces Regulatory Pressure
The regulatory pressure in the US has led Bitstamp to halt its staking services in the country, following similar moves by other crypto assets exchanges. As the US CEO and the global Chief Commercial Officer at Bitstamp, Bobby Zagotta, stated, the "current regulatory dynamics" in the US have driven this strategic decision.
Bitstamp's move to halt ETH staking services echoes a broader trend in the industry. In February, the rival crypto exchange, Kraken suspended its US staking products, opting to pay USD $30 million to settle allegations by the SEC. Additionally, the regulatory landscape's uncertainty has left major players reevaluating their offerings, as seen with Coinbase, which has challenged the merit of a lawsuit by the regulator.
Response to SEC's Scrutiny
In light of this move, Bitstamp joins a list of countries where staking services are unavailable, including Canada, Japan, Singapore, and the UK. The decision aligns with recent legal developments in the US, where the exchange previously suspended trading for seven altcoins.
More than two weeks ago, Finance Magnates reported that Bitstamp had announced the suspension of trading for tokens, such as Axie Infinity (AXS), Decentraland (MANA), Chiliz (CHZ), Sandbox (SAND), and Solana (SOL). This action was promoted by the SEC, categorizing certain tokens as securities in the recent lawsuit against major exchanges like Binance and Coinbase.
Meanwhile, this month, Bitstamp has unveiled plans to secure funding that will fuel the launch of derivatives trading in Europe, along with expanding its operations in both the UK and Asian markets. Bitstamp's pursuit for additional funds commenced two months ago, with the involvement of Galaxy Digital Holdings as an advisor in the fundraising efforts. However, the exchange emphasized that it is not for sale.
This article was written by Jared Kirui at www.financemagnates.com.
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