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What does the future hold for ETH staking post SEC’s Kraken ruling?

3min Read
What does the future hold for ETH staking post SEC's Kraken ruling?

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  • ETH tanked to a two-week low at press time.
  • However, ETH’s staking activity was not massively impacted. 

The crypto space felt the pinch of yet another U.S. Securities and Exchange Commission (SEC) ruling. According to a 10 February tweet by Wu Blockchain, Kraken, the second-largest exchange in the U.S., “immediately” ceased its crypto staking-as-a-service platform for U.S. customers.

Read Ethereum’s [ETH] Price Prediction 2023-2024

This was done after the SEC charged Kraken with a $30 million penalty once the latter failed to register the offer and sale of its crypto staking program. Moreover, Kraken confirmed that it would unstake all assets other than Ethereum [ETH], since ETH unstaking would only be possible after the Shanghai Upgrade

ETH tanked to its two-week low at the time of writing. 

End of staking is near?

This development came less than 24 hours after Coinbase CEO Brian Armstrong’s speculative tweet on the future of crypto staking in the U.S. sparked FUD in the crypto space. Now that the ruling has been made public, Coinbase, too, felt the heat. Its shares plummeted by about 14% during Thursday’s trading hours, its biggest drop since July 2022.

Brian Armstrong took to Twitter again to assuage the crypto community and stated that Coinbase would protect its customers from ‘government outreach.’

There have been apprehensions over SEC’s view of ETH as a security post its staking feature. SEC chair Gary Gensler said,

“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.”

Should ETH investors press the panic button?

The news created doubts in the minds of ETH investors, which was evident in the fall in ETH balances on exchanges, per data from Glassnode. At the same time, the number of daily active addresses also dipped by 5%. 

Source: Glassnode

Interestingly, staking activity remained immune to a greater degree, as revealed by the increase in ETH staked. Additionally, the growth in validators on ETH 2.0 also rose steadily. However, with more regulatory tightening on the anvil, these key staking metrics could be in the red in the days to come. 

The weighted sentiment for ETH went deeper into the negative territory, signifying investors’ uneasiness at the moment. 

Source: Santiment

How much are 1,10,100 ETHs worth today?

At press time, ETH fell by over 5% to trade at $1547.13. It had traded in a range since 20 February but was in real danger of breaking to the downside. 

The Relative Strength Index (RSI) went below neutral 50, which was a negative sign. The Moving Average Convergence Divergence (MACD) line went below the signal line, paving the way for bears to take back control. Moreover, the On Balance Volume (OBV) made lower-lows of late, adding evidence to the bearish idea. 

Source: TradingView ETH/USD


Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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