SEC's Crackdown On Crypto Staking Forces Bitstamp To End Service For US Clients

Zinger Key Points
  • SEC's crackdown on crypto staking forces exchange to reconsider services.
  • Crypto staking in the U.S. in turmoil as exchanges abandon services due to regulatory uncertainty.

Bitstamp, a leading cryptocurrency exchange, has announced the termination of its ether staking program for American clients starting next month.

Bobby Zagotta, the U.S. CEO and global chief commercial officer of Bitstamp said, "Starting September 25, 2023, Bitstamp will no longer offer staking services in the United States."

He further clarified that this change would result in U.S. clients not receiving staking rewards, but other services provided by Bitstamp would continue as usual, The Block reported.

This decision is a response to the evolving regulatory landscape in the U.S.

The Securities and Exchange Commission (SEC) recently scrutinized staking services, asserting that they should be classified as investment contracts and, consequently, need to be registered as securities.

In a related development earlier this year, Kraken, another cryptocurrency exchange, halted its staking service for American users.

This move was part of a $30 million agreement with the SEC over accusations of an unregistered securities offering. Additionally, the SEC has taken legal action against Coinbase Global Inc COIN, alleging that the crypto platform's prime brokerage, exchange and staking initiatives breach securities regulations.

Following this, Coinbase suspended its staking services in several states, including California, New Jersey, South Carolina, and Wisconsin.

Highlighting the regulatory challenges, Zagotta remarked, "Considering current regulatory dynamics in the U.S., we've made the decision to discontinue staking for customers residing in the United States."

At the beginning of August, Bitstamp declared that a minimum of seven alternative cryptocurrencies would be discontinued in the U.S.

These included Axie Infinity AXS/USD, Chiliz CHZ/USD, Decentraland MANA/USD, Polygon MATIC/USD, Near NEAR/USD, The Sandbox SAND/USD and Solana SOL/USD.

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Posted In: CryptocurrencyGovernmentNewsSECMarketsBitstampBobby Zagottacrypto regulationsCryptocurrency ExchangeEther stakingKrakenSecurities and Exchange Commissionstaking servicesU.S.
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