Uphold Restores Crypto Staking Features to US Customers After Regulatory Pause – CryptoNinjas

Key Takeaways:

• Staking is back: Uphold has restarted its crypto staking service in the United States.
• Reasoning: This decision is driven by a perceived change in the US regulatory environment with respect to crypto.
• Impact: It may boost user participation and demonstrate confidence in the US crypto market.

Global cryptocurrency exchange Uphold has now officially marked the relaunch of its crypto staking services in the US. It is a major strategic shift for the company, which had previously suspended the service in 2023 over regulatory uncertainty. The move comes at a time when many believe the regulatory climate in the US is less antagonistic to digital assets.

Why the Relaunch? The Evolving Landscape of Crypto: A Look Back

There are a number of reasons behind this decision to reintroduce staking for its US customers. The changing view of US regulators toward the cryptocurrency industry may be the most important thing.

• Easing Regulatory Pressure: The US SEC seems to be taking a less aggressive stance, as even one of the SEC’s multiple high-profile cases on crypto companies was dropped (including against Coinbase, a major US-based exchange). Whether a genuine change of heart or merely a change in strategy, this pivot affords at least a little breathing room for crypto businesses operating in the US. While the SEC remains focused on the crypto industry, the relaxed attitude is welcomed.
• Crypto-Savvy Regulators Emerge: Crypto-favorable regulations have indeed been a big factor, with Uphold naming those with deeper knowledge of blockchain tech in government as significant. The company lauded names such as Hester Peirce, one of the few crypto supporters inside the SEC, and Paul Atkins, an early candidate to be the next Chair of the SEC, implying that crypto regulation will be better grounded in reality moving forward. It’s a shrewd vote of confidence for people they believe understand the aligned technology beyond whatever potential risks.
• Positive Changes in the Legal Landscape: According to Uphold’s CEO, this sentiment is echoed across the industry at the moment, in the hopes of a future where innovation can take place without smothering under stringent or vague regulations. This change in the legal environment has been influenced by the new presidential administration, with “common sense prevailing in the US approach to crypto policy”.

What is Uphold Offering?

Starting on March 3, 2025, Uphold customers in the US will be eligible to earn staking rewards on a wide range of 19 different cryptocurrencies. This broad selection offers users greater flexibility in engaging with the staking process.

Here’s a breakdown of rewards:

Of course, these numbers are estimates and can vary based on network conditions and staking participation.

It should be mentioned that rewards will be given out weekly and paid out in the asset that was staked. This means that users can compound their earnings through re-staking, potentially increasing their returns over time.

More News: Liquid Staking on Ethereum Explodes—TVL to Explode From $284M to $17B by 2024

Flashback: What Led to Staking Being Paused in the First Place

To understand the meaning of this relaunch, it’s crucial to recall why Uphold suspended its staking service in the United States back in 2023. This was particularly the case due to regulatory uncertainty surrounding crypto staking, driven by the SEC’s so-called “regulation by enforcement” strategy under Gary Gensler’s leadership, which led Uphold’s CEO to suspend staking services.

The SEC said many staking providers were failing to give sufficient disclosure to customers, especially about how their staked assets were secured. The agency also examined whether staking services were unregistered securities offerings. This regulatory uncertainty had a chilling effect and drove many exchanges to stop or limit their staking offerings in the US.

Kraken Precedent: Real-World Consequence

One notable example of this regulatory action was when the SEC settled with Kraken — another leading crypto exchange — for $30 million after it had offered unregistered staking services. The extremely public case was a harbinger for the rest of the industry and likely led directly to Uphold’s suspension of staking. You can see how companies might get gun-shy in the face of such a punitive action.

Ripple Effects: Implications of the News for the Crypto Industry

Uphold’s return to the US staking market might have multiple favorable impacts for the overall crypto ecosystem:

• Boosted User Engagement: By allowing users to earn passive income based on their crypto holdings, staking creates a financial incentive for users to hold their assets, thereby encouraging them to stay involved with the network. This could lead to greater liquidity and stability in the market. For many, staking provides a low-key way to get their feet wet in crypto investment.
• Backing for Blockchain Networks: Staking is a crucial process for securing and operating numerous blockchain networks that use Proof-of-Stake (PoS) consensus algorithms. As they stake their tokens, they help to validate transactions on the network, and they get rewarded for doing so. It is a symbiotic relationship that strengthens the ecosystem.
• Positive Market Sentiment: With a positive outlook in mind, Uphold makes a bold move in saying that it is optimistic about the US crypto market. Uphold is betting that the overall regulatory environment continues to trend positively and that the demand for staking services will grow, driven by investment in staking infrastructure and re-entry into the market.

More News: 10 Best Staking Platforms in 2024

Looking Forward: The Need for Clearer Regulation

Uphold’s relaunch is certainly a welcome move but it’s important to keep in mind that hurdles remain ahead. Time will tell, but regulatory clarity is the main driver for long-term growth and innovation in the crypto space. The same goes for businesses that need certainty about when they can proceed to plan ahead and make decisions with confidence.

To develop a regulatory environment that clearly protects consumers while fostering innovation, we need more collaboration between regulators, industry actors, and the user community. Only then can the full potential of cryptocurrency and blockchain technology be realized. Finding such a delicate balance is crucial to the future of crypto in the US.