Bitstamp, one of the world’s longest-running cryptocurrency exchanges, has announced it will discontinue Ether (ETH) staking services for U.S.-based customers starting September 25, 2023. This decision follows the recent suspension of trading for several altcoins in the country, reflecting the ongoing regulatory challenges in the U.S. crypto market.
Key Takeaways
- Bitstamp will end ETH staking services for U.S. customers on September 25, 2023.
- The decision follows the suspension of trading for seven altcoins in the U.S.
- Regulatory pressures from the U.S. Securities and Exchange Commission (SEC) are a significant factor.
Discontinuation of ETH Staking
In a message shared with Cointelegraph, Bitstamp announced that U.S. customers would no longer be able to stake Ether (ETH) starting September 25, 2023. Bobby Zagotta, U.S. CEO and global chief commercial officer at Bitstamp, stated that customers would continue earning staking rewards until the cutoff date. After that, all staked assets will be unstaked, and both rewards and principal will be credited to users’ main Bitstamp account balances. Zagotta also noted that it might take a few days for users’ balances to reflect these changes.
Bitstamp charges a 15% commission on all staking rewards. The monthly reward rate for staking ETH on the exchange is 4.50%, compared to 1.60% for staking Algorand (ALGO). With this move, the U.S. joins other countries where Bitstamp’s staking services are unavailable, including Canada, Japan, Singapore, and the United Kingdom.
Regulatory Pressures
The decision to halt ETH staking appears to be influenced by recent legal developments in the United States. In early August, Bitstamp announced it would no longer offer trading for seven altcoins in the country: Axie Infinity (AXS), Chiliz (CHZ), Decentraland (MANA), Polygon (MATIC), Near (NEAR), The Sandbox (SAND), and Solana (SOL). While the company did not specify the reasons for suspending trading, all seven tokens were deemed unregistered securities by the SEC in June as part of its lawsuits against crypto exchanges Binance and Coinbase.
Broader Implications
The SEC has been scrutinizing the crypto industry, particularly focusing on whether certain cryptocurrencies should be classified as securities. Ether, the native cryptocurrency of the Ethereum blockchain and the second largest by market cap behind Bitcoin (BTC), is at the center of this debate. The Commodity Futures Trading Commission (CFTC) has repeatedly called Ether a commodity, while SEC Chair Gary Gensler has refrained from specifying whether ETH should be deemed a security.
Future Outlook
Bitstamp’s decision to halt ETH staking and the trading of several altcoins highlights the complex and evolving regulatory landscape for cryptocurrencies in the United States. As the SEC continues to enforce its stance, more exchanges may follow suit to avoid legal complications. The crypto community will be closely watching how these regulatory actions unfold and their impact on the broader market.
For now, U.S.-based Bitstamp users will need to adjust to these changes and explore alternative platforms or services for their staking and trading needs.
