• The SEC has urged US-based crypto exchanges offering staking programs and interest-bearing products to comply with securities laws.
• Of the 874,199 ETH tokens pending withdrawals, 682,552 ETH are waiting to be withdrawn by Kraken, Coinbase, and Gemini which account for roughly 78%.
• Kraken leads entities processing withdrawals and has confirmed that it is processing withdrawals for its U.S. clients after the Shapella Upgrade was completed.
SEC Regulatory Actions on U.S.-Based Exchanges
The U.S. Securities and Exchange Commission (SEC) has issued a directive to crypto exchanges operating in the country urging them to comply with securities laws when offering staking programs and interest-bearing products. This directive has led some of the largest exchanges such as Kraken, Coinbase, and Gemini to withdraw their staked Ethereum (ETH).
Pending ETH Withdrawals
There are currently 874,199 ETH tokens pending withdrawal of which 682,552 ETH belongs to US-based exchanges – accounting for roughly 78% of total pending withdrawals according to Nansen’s dashboard. Leading this pack is Kraken with 556,272 ETH worth about $1.17 billion waiting to be withdrawn from its platform.
Kraken Processing Withdrawals
Kraken’s support team has confirmed that it is now processing withdrawals for its U.S.-based customers following the successful completion of the Shapella upgrade on Ethereum’s blockchain network. Additionally, any locked ETH will automatically enter into an unstaking process once the upgrade is complete.
SEC Fine & Staking Service Termination
In February 2021, the SEC fined Kraken $30 million for failing to register its staking product as a security in accordance with applicable regulations in the country. Following this fine, Kraken announced that it would end its staking service for all users based in the United States while still allowing users outside of America to continue using it without disruption or limitation on returns earned through yield farming activities on other platforms such as Uniswap or SushiSwap where they don’t have legal restrictions against them like they do in America due to SEC regulations specified by law enforcement agencies there regarding how digital assets should be treated legally according how they’re classified under existing federal statutes within domestic borders only; meaning outside investors can still participate in DeFi markets without having their activities restricted as long as those transactions take place elsewhere instead domestically inside U.S territory lines bound by state boundaries here domestically speaking only not internationally yet..
Conclusion
In conclusion, due to regulatory pressure from the SEC on US-based crypto exchanges offering staking services and interest bearing products have been forced into compliance leading them withdraw their stake Ethereum funds from these platforms while users outside of America can continue utilizing yield farming services like Uniswap or SushiSwap without legal repercussion since these activities are not subject to SEC regulation abroad unlike taxation depending upon what jurisdiction one resides within globally speaking at least if applicable at all until further notice so far either way.;