The prominent cryptocurrency exchange Bitstamp is poised to stop bitcoin staking services for its American clients beginning September 25 in a strategic play spurred by the shifting tides of US regulations. According to Chief Executive Officer Bobby Zagotta, this decision is the latest result of the “current regulatory dynamics” in the United States.
Bitstamp, the world’s oldest crypto exchange, has joined a growing list of digital asset platforms that are limiting their offerings to US consumers due to a strained relationship with the US Securities and Exchange Commission (SEC). The end of staking services, in which tokens are staked to confirm transactions on blockchain networks and earn rewards, will be implemented at the end of September.
The SEC sparked a regulatory tempest earlier this year when it filed a lawsuit against Kraken, a leading cryptocurrency exchange. The SEC accused Kraken of running an unregistered crypto-staking program and asked that it be shut down. Kraken agreed and agreed to pay $30 million in disgorgement, prejudgment interest, and civil penalties.
This forceful regulatory approach did not end with Kraken. The SEC went on the offense against Binance and Coinbase, two industry titans, accusing them of breaking various laws and engaging in unregistered securities trading. Bitstamp’s latest decision will have an influence on a variety of altcoins, including AXS, CHZ, MANA, MATIC, NEAR, SAND, and SOL, as the exchange adapts to the changing market.
The SEC’s harsh actions are reverberating throughout the industry. GameStop, a well-known US game merchandise shop, has announced that their cryptocurrency wallet service would be discontinued in November. Similarly, fintech behemoth Revolut will restrict access to cryptocurrencies for its US customers, citing a “evolving regulatory environment” and “uncertainties around the crypto market.”
As regulatory turbulence continues to affect the crypto sector, Bitstamp, GameStop, and Revolut’s choices demonstrate the far-reaching repercussions of US regulatory initiatives. As the crypto ecosystem evolves under the careful eye of regulatory agencies, industry participants are forced to adapt and pivot in order to traverse the intricate maze of regulations and uncertainties.
