SEC Goes After Ethereum Staking, But What Happens To All The Staked ETH?

On Thursday, it was revealed that crypto exchange Kraken reached a settlement with the Securities and Exchanges Commission (SEC) to stop offering staking services for Ethereum and similar cryptocurrencies. This news understandably triggered a dip in the prices of digital assets across the space, but the question now becomes, where does all of the staked ETH go?

Users Wonder Where Kraken Staked ETH Will Go

Kraken’s agreement with the SEC saw it stop offering crypto staking services to retail investors in the United States immediately after the announcement was made. In Kraken’s announcement, it said that it will unstake all staked tokens and users will receive their staked crypto in their balances, but it is different for Ethereum.

Now, Ethereum currently differs from other staking networks in the fact that users are not yet able to withdraw their staked ETH. This means that all of the staked ETH that users have on Kraken will remain locked. So despite the crypto exchange’s agreement with the SEC, U.S. retail investors will still be able to earn rewards on their staked ETH, they just won’t be able to add to their positions.

Kraken says that this will continue until the “Shanghai” upgrade which will add a withdrawal capability for the contract. Once this happens, all of the ETH staked through the exchange will be unstaked and returned to the users.

Ethereum On The Charts

Over the last day, Ethereum has seen a decline in its price along with the rest of the cryptocurrency market. The digital asset which had been maintaining its value above $1,600 for the better part of the week saw a sharp plunge that brought its price back down to the $1,500 level. 

As a result, the price of the cryptocurrency is now trading below its 20-day moving average. What this means is that while ETH has been able to maintain its bullish momentum, selling pressure is already piling up from the shooters, meaning that momentum is beginning to swing in the favor of the bears.

If ETH is unable to hold $1,500 and falls to the $1,300 level, then it will likely mark an end to the mini-bull run that the asset has experienced since the beginning of February. Thus, it is imperative that bulls maintain support at $1,500 to establish an upward trend once more.

At the time of this writing, Ethereum’s price is down over 4.80% in the last 24 hours to be trading at $1,552, according to data from Coinmarketcap.