SEC Pushes US Crypto Exchanges to Withdraw Staked Ethereum

• The SEC has urged US-based crypto exchanges offering staking programs and interest-bearing products to comply with securities laws.
• U.S.-based crypto exchanges – Kraken, Coinbase, Gemini – account for 78% of entities waiting to withdraw their staked Ethereum (ETH).
• Kraken leads the withdrawal process with 556,272 ETH worth about $1.17 billion.

SEC Regulation Pushes US Exchanges to Withdraw Staked Ethereum

The US Securities and Exchange Commission (SEC) has issued a warning urging domestic crypto exchanges that offer staking programs and interest-bearing products to comply with existing securities laws. This has caused a large number of exchange customers in the US to start processing withdrawals of their staked Ethereum (ETH).

US Crypto Exchanges Lead Withdrawal Process

According to Nansen’s dashboard, US-based crypto exchanges such as Kraken, Coinbase, and Gemini account for around 78% of entities waiting to withdraw their staked ETH tokens. These entities are seeking to withdraw 682,552 ETH out of 874,199 ETH tokens pending withdrawals as of press time. Of these 682,552 ETH awaiting withdrawals, Kraken is leading the pack by wanting to withdraw 556,272 ETH worth approximately $1.17 billion.

Kraken Confirms Processing Withdrawals After Upgrade

Kraken’s support team confirmed on Twitter that they have been processing withdrawals for their US clients ever since the Shapella Upgrade was completed. The exchange also added that any locked ETH will automatically enter the unstaking process following the upgrade completion. This comes after the SEC fined Kraken $30 million earlier this year for failing to register its staking product as a security in February 2021. Due to this hefty penalty imposed by SEC, Kraken had announced that it would cease providing its staking service for customers residing in the United States at that time.

Coinbase And Gemini Also Follow Suit

Following suit from Kraken’s announcement Coinbase also made an announcement stating that it would end its “earn rewards” program available in the states where it operates effectively immediately due to regulatory uncertainties around digital asset offerings including those involving earning rewards in digital assets or fiat currency.. Similarly like Coinbase’s earn rewards program Gemini also ended its own offering which allowed users in 42 states and territories across United States earn up tp 7% APY on their cryptocurrency holdings stored on the platform via its ‚Gemini Earn‘ product .


In light of recent events it is clear that regulators are taking a stricter stance when it comes digital asset services offered by companies operating within United States jurisdiction . As such all digital asset related services must be compliant with existing regulations otherwise firms could face hefty fines which could have serious consequences both financially and reputationally .