Monday, June 17, 2024
- Advertisment -
HomeDigital AssetsBitstamp halts staking services for US customers
- Advertisment -

Bitstamp halts staking services for US customers

The decision, which doesn’t affect the already staked cryptos, follows the regulatory requirements imposed by several states, which restrict staking services offered to retail users. It comes as a response to the regulatory landscape in the country, particularly the actions of the U.S. Securities and Exchange Commission (SEC).

Dubbed ‘Bitstamp Earn,’ the service enables users to earn dividends or interest on their digital assets for validating transactions and also allows them to vote on changes in the blockchain. Users are rewarded for simply depositing and holding coins on Bitstamp as they normally would.

At the moment, the Bitstamp platform allows for the staking of Ethereum and Algorand and pays rewards of up to 5% annually. This set of assets, according to Bitstamp, must be compliant with jurisdictional regulations and local laws, as well as strict technical, safety, and compliance reviews.

While Ethereum introduced ETH staking in late 2020 ahead of its transition to a Proof-of-Stake (PoS) model, the SEC raised concerns about certain staking-related products potentially being unregistered securities under the Howey Test.

Bitstamp’s CEO for the U.S., Bobby Zagotta, has confirmed that customers will continue to receive staking rewards until September 25, 2023. After this date, staked assets will be liquidtaed, and both rewards and principal will be added to users’ primary Bitstamp account balances. The process usually takes a few days, but it might be extended based on network conditions.

The U.S. SEC has taken legal action against staking service providers in various instances. Both Coinbase and Binance faced lawsuits in which the SEC argued that their staking programs could be classified as investment contracts according to the Howey test. In a similar vein, Kraken, another cryptocurrency exchange, ceased its staking offerings in the U.S. following a $30 million settlement with the SEC in relation to similar allegations.

America’s largest crypto exchange, Coinbase told its customers from California, New Jersey, South Carolina, and Wisconsin that they will no longer be able to stake digital tokens on its platform until further notice.

The move comes barey two weeks after Bitstamp said it will no longer provide seven cryptocurrencies to United States users, citing a challenging regulatory environment in the country.

Starting from August 29, 2023, Bitstamp will suspend trading for a selection of high-market-value altcoins. This list includes Axie Infinity (AXS), Chiliz (CHZ), Decentraland (MANA), Polygon (MATIC), NEAR Protocol (NEAR), The Sandbox (SAND), and Solana (SOL).

RELATED ARTICLES

Most Popular

- Advertisment -
- Advertisment -