Bitstamp ending ETH staking for US customers in September

Bitstamp is ending ether staking for US customers effective Sept. 25.

In a statement emailed to Blockworks, Bitstamp US CEO Bobby Zagotta said, “As a result, US customers will stop receiving staking rewards. All other Bitstamp services will remain unaffected.”

“Customers will continue earning staking rewards up until Sept. 25, 2023, and after that, all staked assets will be unstaked. Rewards, along with the principal, will be credited to users’ main Bitstamp account balances. Typically, this process takes a few days but could be extended depending on network conditions,” the emailed statement continued.

The company said that it is shuttering its staking features due to the US regulatory environment, with Zagotta telling Blockworks that “as one of the most regulated and trusted exchanges in the world, we have a comprehensive framework in place to continuously evaluate the services we support, taking into account the evolving regulatory environment in all jurisdictions in which we operate.”

“Considering current regulatory dynamics in the US, we’ve made the decision to discontinue staking for customers residing in the United States.”

The US Securities and Exchange Commission has — in multiple legal actions — targeted staking services. In its lawsuits against both Coinbase and Binance, it claimed that the staking programs fall under investment contracts under the Howey test.

“At all relevant times, the Coinbase Staking Program, as it applied to each of the five stakeable assets, was an investment contract under Howey, and therefore a security, whose offers and sales were subject to registration under the Securities Act,” the SEC said in its suit against Coinbase.

In June, following the SEC’s suit, multiple states targeted Coinbase’s staking program, with Alabama saying that investors are not protected from potential losses, as “3.5 million staking rewards program accounts nationwide are not insured by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC).”

Additionally, the SEC settled with Kraken back in February over its staking products. 

The company previously told Blockworks that it “agreed to end its on-chain staking services for US clients only. Starting today, with the exception of staked ether (ETH), assets enrolled in the on-chain staking program by US clients will automatically be unstaked and will no longer earn staking rewards. Further, US clients will not be able to stake additional assets, including ETH.”

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