Bitstamp to Halt Crypto Staking Services for US Clients in Sept.

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Summary

  • US cryptocurrency exchange Bitstamp will reportedly disallow US customers from staking cryptocurrencies from September 25.
  • The decision comes as a result of the “current regulatory dynamics” in the world’s largest economy.
  • The SEC has waged war on such offerings since February 2021, when it pressed charges against crypto exchange Kraken.

Bitstamp to Halt Crypto Staking Services for US Customers

Leading cryptocurrency exchange Bitstamp has announced that it will no longer allow US customers to stake cryptocurrencies from September 25. The decision is due to „current regulatory dynamics“ in the United States, according to Chief Executive Officer Bobby Zagotta.

This move follows in the wake of the U.S. Securities and Exchange Commission’s (SEC) vocal opposition to crypto staking offerings since February 2021, when it charged crypto exchange Kraken with providing an unregistered crypto-staking program. Kraken agreed to pay $30 million in disgorgement, prejudgment interest, and civil penalties after being accused by the SEC.

Subsequently, Binance and Coinbase have also faced legal action from the securities regulator for allegedly violating several laws and offering trading services without registering with them first.

What is Crypto Staking?

Crypto staking involves users pledging tokens to help validate transactions on blockchain networks and later earning rewards for their efforts. It is seen as an alternative way of earning passive income compared to other investments such as stocks or bonds.

Regulatory Uncertainty Persists

The move by Bitstamp marks yet another development that highlights how uncertain the U.S.’s regulatory landscape remains when it comes to cryptocurrencies and digital assets. Many exchanges have had to restrict access or remove certain services altogether due to the lack of clarity regarding which activities are allowed under current regulations. This is likely to persist until comprehensive legislation is enacted at a federal level that clarifies what activity is permissible under existing law.

Conclusion

Although not all investors are affected by this news – as only those in the US who use Bitstamp have been impacted – this latest development serves as a reminder of how quickly things can change within a highly volatile industry such as cryptocurrency trading. With more clarity needed over how different aspects of digital asset trading should be regulated, investors should remain cautious about any activity they are considering engaging in until further guidance has been provided by regulators at both state and federal levels