Leading cryptocurrency exchange Bitstamp will discontinue staking services for Ether (ETH) and other crypto assets for U.S. customers next month, according to a Bloomberg report. The company will halt the service by September 25.
“Starting September 25, 2023, Bitstamp will no longer offer staking services in the United States. As a result, U.S. customers will stop receiving staking rewards. All other Bitstamp services will remain unaffected,” Bobby Zagotta, Bitstamp’s U.S. CEO and global chief commercial officer, said.
Regulatory Challenges
Bitstamp noted that its decision to discontinue its Ether staking service was due to the regulatory challenges in the U.S.
“Considering current regulatory dynamics in the U.S., we’ve made the decision to discontinue staking for customers residing in the United States,” Zagotta said.
Zagotta stated that customers will continue earning staking rewards until September 25, after which all staked assets will be unstaked, and the rewards, along with the principal, will be credited to the user’s master account balance.
Staking involves earning rewards by pledging cryptocurrency tokens to help secure a blockchain network. The United States Securities and Exchange Commission (SEC) has been heavily cracking down on staking services in recent months as it views some such products as unregistered securities.
SEC Crackdown on Crypto Staking
Earlier this year, the SEC fined crypto exchange Kraken approximately $30 million for offering unregistered securities to U.S. investors through its staking program.
In June, the securities watchdog sued Coinbase, alleging that the exchange’s prime brokerage and staking programs violate securities laws. Following the lawsuit, the company discontinued its staking services in four U.S. states, including California, New Jersey, South Carolina, and Wisconsin.
Due to the SEC’s regulatory pressure, Bitstamp announced earlier this month that it would discontinue trading for seven cryptocurrencies, including Polygon (MATIC), Solana (SOL), Near Protocol (NEAR), Axie Infinity (AXS), Chiliz (CHZ), Decentraland (MANA) and The Sandbox (SAND).
