Bitstamp Pulls the Plug on ETH Staking for US Clients amid Regulatory Scrutiny

<p>

Amid the changing landscape of cryptocurrency regulations
in the US, Bitstamp, one of the industry's oldest digital asset exchanges, is
making a significant move by discontinuing its <a href="https://www.financemagnates.com/terms/e/ethereum/">Ethereum</a> (ETH) staking services
for customers based in the US. This decision comes as a result of heightened
regulatory dynamics in the country, particularly concerning crypto-staking
services. </p><p>Starting September 25,
2023, the exchange said that US-based users will no longer have access to
staking their ETH on the platform. Before the deadline, users can continue to
earn staking rewards, with these rewards and principal amounts eventually being
credited to users' primary Bitstamp account balances. However, these changes
might take a few days to be fully reflected in users' accounts.</p><p>Bitstamp Faces
Regulatory Pressure</p><p>The regulatory pressure in the US has led Bitstamp to halt its staking services in the country, following similar moves
by other crypto assets exchanges. As the US CEO and the global Chief Commercial
Officer at Bitstamp, Bobby Zagotta, stated, the "current regulatory
dynamics" in the US have driven this strategic decision.</p><p>Bitstamp's move to halt
ETH <a href="https://www.financemagnates.com/terms/s/staking/">staking</a> services echoes a broader trend in the industry. In February, the rival
crypto exchange, Kraken suspended its US staking products, opting to pay USD $30
million to settle allegations by the SEC. Additionally, the regulatory
landscape's uncertainty has left major players reevaluating their offerings, as
seen with Coinbase, which has <a href="https://www.financemagnates.com/cryptocurrency/coinbase-plans-to-file-motion-challenging-sec-lawsuit/" target="_blank" rel="follow">challenged the merit</a> of a lawsuit by the
regulator.</p><p>Response to SEC's
Scrutiny</p><p>In light of this move,
Bitstamp joins a list of countries where staking services are unavailable,
including Canada, Japan, Singapore, and the UK. The decision aligns with recent
legal developments in the US, where the exchange previously suspended trading
for seven altcoins.</p><p>More than two weeks ago, <a href="https://www.financemagnates.com/cryptocurrency/bitstamp-hunts-for-funds-crypto-exchange-plans-derivatives-trading-launch-in-europe/" target="_blank" rel="follow">Finance
Magnates</a> reported that
Bitstamp had announced <a href="https://www.financemagnates.com/cryptocurrency/bitstamp-halts-trading-of-multiple-cryptos-for-us-users-citing-regulations/" target="_blank" rel="follow">the
suspension of trading for tokens</a>, such
as Axie Infinity (AXS), Decentraland (MANA), Chiliz (CHZ), Sandbox (SAND), and
Solana (SOL). This action was promoted by the SEC, categorizing certain tokens
as securities in the recent lawsuit against major exchanges like Binance and
Coinbase.</p><p>Meanwhile,
this month, Bitstamp has <a href="https://www.financemagnates.com/cryptocurrency/bitstamp-hunts-for-funds-crypto-exchange-plans-derivatives-trading-launch-in-europe/" target="_blank" rel="follow">unveiled
plans to secure funding</a> that
will fuel the launch of derivatives trading in Europe, along with expanding its
operations in both the UK and Asian markets. Bitstamp's pursuit for additional
funds commenced two months ago, with the involvement of Galaxy Digital Holdings
as an advisor in the fundraising efforts. However, the exchange emphasized that
it is not for sale.</p>

This article was written by Jared Kirui at www.financemagnates.com.