Bitstamp Ceases ETH Staking for US Customers Amidst SEC Action

Bitstamp, one of the oldest cryptocurrency exchanges, has announced that it will discontinue ETH staking services for US consumers beginning in September.

The development coincides with the Securities and Exchange Commission’s (SEC) enforcement.

Crypto staking is earning rewards by pledging tokens to support the blockchain’s operation. Before the blockchain transitioned to a Proof-of-Stake (PoS) network, Ethereum began offering ETH staking in December 2020.

Nonetheless, the SEC considers certain stake-related products to be unregistered securities.

The Bitstamp US CEO, Bobby Zagotta, stated that consumers will continue to receive staking rewards until September 25, 2023.

After this date, all staked assets will be unstacked, and rewards and principal will be added to users’ primary Bitstamp accounts.

This procedure typically takes a few days, though it may be extended based on network conditions.

The company is discontinuing its staking features due to U.S. regulations. According to Zagotta, Bitstamp is a highly regulated and trustworthy exchange.

They have a system in place to regularly review the services they provide and contemplate changing regulations in all their locations of operation.

“Given the present regulatory environment in the United States, we’ve decided to discontinue staking for American customers,” Zagotta explained.

In multiple instances, the Securities and Exchange Commission of the United States has taken legal action against staking service providers.

According to the Howey test, staking programs can be deemed investment contracts in lawsuits against Coinbase and Binance.

In June, the agency filed a lawsuit against Coinbase Global Inc., alleging that its provision of staking services violated its regulations.

Previously, Kraken ceased staking offerings in the United States after announcing a $30 million settlement with the SEC to resolve comparable allegations.

Bitstamp announced new financing earlier this month to expand its derivatives trading services on global markets.