Bitstamp, a Luxembourg-based crypto exchange, announced today that it is bringing back Ethereum staking in the United States, based on the regulatory environment in the country. The exchange has announced the demonetization of seven tokens from its platform earlier this month.
Bitstamp's CEO and chief commercial officer Bobby Zagotta said: 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.
In considering current regulatory dynamics in the US, we have made the decision to discontinue staking for customers residing in the United States, he said.
Customers will continue earning staking rewards up until Sept. 25, 2023, and after that, all staked assets will be untaken. The rewards, along with theprincipal, will be credited to users' main Bitstamp account balances. Typically, this process takes a few days but could be extended depending on network conditions, Bitstamp said in an emailed statement.
The SEC previously said that staking programs falls under investment contracts under the Howey Test, which determines what qualifies as an investment contract, subjecting the asset to U.S. securities laws.
At all relevant times, the SEC said 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. In February, the financial watchdog claimed that Kraken did not register the offer and sale of its cryptocurrency asset staking-as-a-service program and was fined $30 million.
Crypto security staking is the process of locking up crypto assets for a period of time to support the operation of a blockchain where the assets are pledged to the network, which sends them to a specific blockchain address.
Bitstamp's latest announcement about the suspension of its ETH staking program came on the heels of its plan to discontinue the trading of Solana SOL Polygon MATIC and other tokens for its U.S. users.
Bitstamp said it will stop trading for the following cryptocurrencies in the US starting from August 29, 2023, which includes AXS,CHAZ, MANA, MATIC, NEAR, SAND and SOL. The exchange emphasized that new orders involving these assets will be disabled, and existing orders across all these trading pairs will be canceled.
Bitstamp trading will no longer be possible for assets like Axie Infinity AXS Chiliz CHZ Decentraland MANA Polygon MATIC NEAR protocol NEAR The Sandbox Sand and Solana SOL on Bitstamp beginning Tuesday.