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The Staking Crackdown: An Opportunity for Non-US Investors?
Implications and Winners in the Light of SEC's Move on Crypto Staking-as-a-Service
The US Securities and Exchange Commission’s (SEC) announcement to shut down a US-based crypto exchange’s staking service has sent shockwaves through the crypto markets.
However, despite the initial panic, the announcement presents an opportunity for non-US-based investors to benefit from staking rewards. In this post, we’ll explore the implications of SEC enforcement and who the winners are likely to be.
The SEC Enforcement and its Implications
The US SEC has shut down the staking service offered by Kraken for U.S. customers as staking was considered a “security” and hence needed to be registered with the SEC. Staking rewards are offered to those who validate transactions on the blockchain, and those who commit assets to the network are selected to validate transactions.
In addition, the SEC accused Kraken of misrepresentation as there was a lack of disclosure when they offered the staking service:
While the SEC enforcement is negative for the industry, it has excluded U.S. crypto users from participating in the innovation. The more users are willing to stake, the lower the incentive pool payout to the average staker and the SEC’s move is likely to result in higher rewards for non-US-based stakers.
Staking Opportunities for Non-US Investors
Non-US investors can still participate in staking. The Ethereum testnet has processed the first three simulations ahead of the Shanghai March upgrade, where staked Ethereum can be withdrawn and become liquid. The anticipation of the upgrade has led to a bullish outlook on Ethereum.
Only 14% of ETH is currently staked, and with the average top 10 Layer 1 having 58% staked, there is expected to be more staking to come, putting upward pressure on prices. In the future, 95% of all tokens will likely be staked to generate extra yields, making it an attractive option for investors.
Other Thrilling Developments in Crypto
In addition to staking, many other exciting developments are happening in crypto…
For example, Elon Musk’s sudden following of the Twitter handle of OKB, the native token of the OKX crypto exchange, has doubled the token’s value.
Korea is also expected to pass constructive crypto legislation this year, and its largest crypto exchange, Upbit, is winning a lot of market shares for non-USD crypto exchanges.
In conclusion, while SEC enforcement has created nervousness in the crypto markets, it presents an opportunity for non-US investors to benefit from staking rewards. With exciting developments happening in crypto, such as staking and new crypto legislation, we remain bullish on the crypto industry. The winners are likely to be non-US staking providers, and investors can take advantage of these opportunities by staking up and enjoying the sizzle.