Bitstamp Axes ETH Staking in Wake of SEC Lawsuits

The SEC has put significant pressure on U.S. crypto exchanges with recent lawsuits.

Kid in an empty pool being very disappointed.
Created by Gabor Kovacs from DailyCoin
  • The SEC has put significant pressure on U.S. crypto exchanges with recent lawsuits.
  • Bitstamp is taking preemptive steps to avoid legal action from the regulator.
  • The exchange’s latest decision involves the ability of customers to earn ETH staking rewards.

So far, in 2023, the U.S. SEC has unleashed a barrage of crypto enforcement actions, labeling several altcoins as unregistered securities and arguing that crypto staking services represented investment contracts.

In response to the SEC’s onslaught, some exchanges have taken preemptive steps to avoid the regulator’s ire. One such exchange is Bitstamp.

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Following a decision to delist several popular altcoins, Bitstamp has taken another step to avert the agency’s attention from its business.

Bitstamp to End ETH Staking

According to reports on Thursday, August 24, Bitstamp will discontinue its Ethereum (ETH) staking service for U.S. customers on September 25. 

Bitstamp National CEO Bobby Zagotta reportedly disclosed that the decision to halt staking services for U.S. customers was taken in consideration of “current regulatory dynamics.”

The exchange will unstake all staked assets past the September 25 deadline, crediting customer accounts with their staked assets and accrued rewards. While the firm expects the process to take only a few days, it also noted that it could take longer depending on network conditions.

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Bitstamp’s decision comes after Kraken was forced to halt its staking service for U.S. customers as part of a $30 million settlement with the SEC in February 2023. On the other hand, Binance and Coinbase are currently fighting the SEC’s stance in court following lawsuits in June 2023.

On the Flipside

  • Bitstamp controls only 0.2% of the Ethereum staking market share.
  • Decentralized alternatives like Lido exist for users looking to earn ETH staking rewards.

Why This Matters

Bitstamp’s decision to end staking services for U.S. users highlights the effects of the SEC’s crypto crackdown on the crypto industry, strengthening arguments that the regulator is driving crypto innovation offshore.

Read this to learn more about the SEC’s stance on crypto staking:

Why the SEC’s ‘Staking Ban’ Is Not What You Think

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Okoya David

David Okoya is a crypto news reporter at DailyCoin based in Nigeria. He covers various topics related to the cryptocurrency industry, including exchanges, regulations, and price movements, and strives to bring fresh angles to breaking news. With experience as a freelance crypto news writer, David upholds the highest journalistic standards, telling complete stories and answering lingering questions whenever possible.