- Bitstamp to halt ether (ETH) staking for U.S. customers on September 25, 2023.
- Move influenced by heightened regulatory scrutiny by the US SEC, which categorizes staking services as investment contracts
Bitstamp, a long-standing cryptocurrency exchange, has announced its decision to end the ether staking program for all U.S. customers starting next month. Bobby Zagotta, Bitstamp’s U.S. CEO and global chief commercial officer, stated that the staking services will be discontinued from September 25, 2023.
This change means that U.S. customers will no longer receive staking rewards, while all other Bitstamp services will continue without disruption. The move to halt staking operations in the U.S. comes as a response to heightened regulatory scrutiny, particularly from the Securities and Exchange Commission (SEC), which has raised concerns about certain staking products potentially being unregistered securities.
In a statement by Bitstamp US CEO Bobby Zagotta, the decision to end the ether staking program is attributed to the current regulatory landscape in the United States. Zagotta emphasized that U.S. customers will no longer receive staking rewards due to this change, though other Bitstamp services will continue uninterrupted.
After this date, staked assets will undergo the unstaking process, with both rewards and principal amounts credited to users’ main Bitstamp account balances. The duration of this process might vary depending on network conditions.
Notably, Bitstamp charges a 15% commission on staking rewards, and its monthly reward rate for staking ETH is 4.50%, while for Algorand (ALGO), it stands at 1.60%. This move aligns the U.S. with other nations where Bitstamp’s staking services aren’t accessible, including Canada, Japan, Singapore, and the United Kingdom
Staking rewards will persist for customers until September 25, 2023. Subsequently, all staked assets will undergo the unstaking procedure,” Zagotta explained. “Both rewards and the initial amount will be deposited into users’ primary Bitstamp account balances. Normally, this process concludes within a few days, although potential extensions may occur due to network conditions.
The dynamic regulatory landscape continues to drive changes in the cryptocurrency exchange sector. This year, Kraken, a prominent crypto platform, suspended staking services for U.S. users as part of their $30 million settlement with the SEC, addressing allegations of providing unregistered securities.
Concurrently, Coinbase, another significant player in the crypto industry, faced SEC legal action. The charges pertained to security law violations related to their prime brokerage, trading, and staking programs. Consequently, Coinbase opted to discontinue staking offerings in various U.S. states, including California, Wisconsin, South Carolina, and New Jersey.