Global cryptocurrency exchange Bitstamp has announced that it will terminate its Ethereum staking service for US users due to increasing regulatory uncertainty in the country. The exchange has set September 25 as the deadline for users to earn rewards on their staked assets. After this date, the staked tokens will be withdrawn and returned to users’ accounts.
Bitstamp cited the current regulatory dynamics in the US as the reason for discontinuing the service for customers residing in the country. This move follows Bitstamp’s discontinuation of seven other cryptocurrencies, including Polygon (MATIC) and Solana (SOL), which are considered “unregistered securities” by the US Securities and Exchange Commission (SEC).
The SEC’s approach to cryptocurrency regulation has raised concerns and sparked scrutiny. The lack of clarity in the regulatory landscape has created uncertainties for users and service providers. The SEC has taken legal actions against major crypto exchanges such as Binance and Coinbase, accusing them of offering unregistered securities and violating securities laws. Earlier this year, the SEC imposed a $30 million penalty on Kraken for offering staking services to US customers, leading the exchange to halt its crypto-staking services for US customers.
This decision by Bitstamp adds complexity to the regulatory landscape, particularly as staking gains popularity in the booming Decentralized Finance (DeFi) sector. The classification of Ethereum’s native cryptocurrency, Ether, as a commodity or a security remains unclear. While the Commodity Futures Trading Commission (CFTC) has classified Ether as a commodity, the definitive categorization of Ethereum’s cryptocurrency is still pending.
The discontinuation of Ethereum staking for US users highlights the need for clearer regulatory guidelines that strike a balance between fostering innovation and safeguarding investor interests.