North American cryptocurrency users will not be able to stake ApeCoin, the ERC-20 metaverse token issued by Yuga Labs, according to a company statement on Wednesday.
The ApeCoin DAO claimed that the “current regulatory environment” left it with “no good alternative” other than to selectively geo-block the service in numerous areas, including Canada and the United States.
Yuga bows to the regulators
in his last project update, ApeCoin offered details about the upcoming release of ApeStake.io. The site will go live on September 5, after which the associated smart contract will be funded within two days. Participants can start accumulating rewards a week after launch on December 12.
However, as detailed at the bottom of the page, staking ApeCoin can be much more difficult for some users than others, depending on their location. Countries and regions, including the United States, Canada, Syria, Iran, Cuba, Russia, Crimea, Donetsk, and Luhansk, will be geo-blocked from participating.
“We are aware that geo-blocking some users in North America is inconvenient for many members of the Apecoin community,” Yuga said. “Unfortunately, in the current regulatory environment, we didn’t have a good alternative.”
“Staking” on crypto often refers to locking up one’s cryptocurrency to secure a given blockchain network, while being rewarded with network fees and subsidies. It can also refer to any service that requires someone to save their digital currencies in exchange for a periodic return.
Such a product puts ApeCoin in the crosshairs of US securities regulators, who have been clamping down on cryptocurrency lenders providing similar services all year. For example, a California watchdog tidy Nexo will stop offering interest-bearing crypto accounts in September, considering them unregistered securities.
The Securities and Exchange Commission (SEC) feels the same way: It blocked Coinbase from issuing a lending product last year and even He suggested that “proof-of-stake”-based cryptocurrencies might be more like securities.
The federal agency began doing research Yuga Labs for potentially violating securities laws last month. He suspected that certain NFTs, as well as Apecoin, may resemble shares or other securities.
A potential loophole?
While ApeCoin may prevent front access to its staking site for certain regions, the organization noted that anyone can technically access the smart contracts.
“We want to remind the community that one of the benefits of decentralized finance is that anyone can interact with a smart contract or develop clients and interfaces that allow users to interact with smart contracts.” said ApeCoin on Twitter on Wednesday.
ApeCoin added that third-party companies have already developed alternative interfaces to interact with the contract, beyond the site of origin.
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