Bitstamp says the ongoing crackdown on cryptocurrencies has cost its U.S. staking business.
Beginning Sept. 25, the Luxembourg-based exchange will no longer offer staking services in the U.S., meaning U.S. customers will stop getting staking rewards, Bitstamp said in a statement provided to PYMNTS Thursday (Aug. 24).
“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,” Bitstamp said.
“Considering current regulatory dynamics in the U.S., we’ve made the decision to discontinue staking for customers residing in the United States.”
Staking — generally speaking — is a way for crypto holders to earn passive income on their digital assets while platforms and staking services validate the technologies themselves.
But regulatory scrutiny has pushed some companies out of the staking business. For example,
Kraken ended its staking service for U.S. users in February as part of a settlement with the Securities and Exchange Commission (SEC).
That agreement, which included $30 million in penalties and other costs, came after the SEC charged Kraken with failing to register the offer and sale of this program.
“Whether it’s through Staking-as-a-Service, lending or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws,” SEC Chair Gary Gensler said in the release.
Four months later, the SEC charged Coinbase — the largest crypto exchange in the U.S. — with “failing to register the offer and sale of its crypto asset staking-as-a-service program.”
Beyond the world of staking, the SEC’s actions have led other companies to shed their crypto operations in recent months, with announcements often referencing regulators.
Earlier this month, U.K. FinTech Revolut said it would cease offering crypto services to its U.S.-based customers this fall.
“As a result of the evolving regulatory environment and the uncertainties around the crypto market in the U.S., we’ve taken the difficult decision, together with our U.S. banking partner, to suspend access to cryptocurrencies through Revolut in the U.S.,” the company said.
Video game seller GameStop made a similar decision Aug. 1, saying it will end support of its digital asset wallets in November.
“Due to the regulatory uncertainty of the crypto space, GameStop has decided to remove its iOS and Chrome Extension wallets from the market on November 1, 2023,” the retailer said.
