• Bitstamp is halting its staking service in the US due to regulatory challenges.
• The SEC has been against crypto staking, alleging it meets the criteria of an investment contract under the Howey Test.
• Kraken also agreed to shut down its staking services in the US and pay a $30 million fine to the SEC.
Bitstamp To Halt Staking Service In The US
Cryptocurrency exchange Bitstamp has revealed that it is shutting down its staking service in the United States due to regulatory challenges. As of September 25th, Bitstamp will no longer offer staking services to its users in the United States as per guidance from U.S. regulators.
SEC Against Crypto Staking
The U.S Securities and Exchange Commission (SEC) has been against crypto staking, alleging that the service meets the criteria of investment contracts under the Howey Test which states that an investment of money with a reasonable expectation of profits based on third-party efforts can be deemed an “investment contract” and thus subject to securities laws.
Kraken Agrees To Shut Down Its Staking Services
Kraken, another cryptocurrency exchange agreed to shut down its staking operations in the United States back in February this year to settle SEC charges for offering unregistered securities and was required by law to pay a $30 million fine as a settlement for these charges. This shows just how serious U.S regulators are when it comes to crypto-related activities and their associated regulations.
Crypto Staking An Important Investment Vehicle
Despite all these regulatory issues, cryptocurrency staking has become an important investment vehicle as it allows investors to earn extra rewards for holding their coins and providing liquidity to the ecosystem which had not been possible before cryptocurrencies were introduced on a large scale.
In conclusion, while cryptocurrency exchanges like Bitstamp have halted their services due to regulatory constraints, they still remain popular investments vehicles amongst investors who are willing take advantage of their potential returns with some risk involved .