- 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.
The U.S. SEC charged Kraken with failing to register the offer and sale of their crypto asset staking-as-a-service program and advertise annual investment returns of as much as 21 percent. Kraken agreed to immediately cease staking products and pay $30 million penalties.
— Wu Blockchain (@WuBlockchain) February 10, 2023
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.’
We will keep fighting for economic freedom (our mission at Coinbase). Some days being the most trusted brand in crypto means protecting our customers from government overreach.
— Brian Armstrong (@brian_armstrong) February 10, 2023
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