Crypto exchange Kraken has started proceedings to withdraw all staked Ethereum associated with its users in the US amid the Ethereum Shanghai Upgrade scheduled today, April 12.
In February, the US SEC sued Kraken for offering an unregistered crypto asset staking-as-a-service program to its US clients. Kraken immediately ended its crypto strike, except ETH staked.
“Starting today, with the exception of staked ether (ETH), assets enrolled in the on-chain staking program by US customers will be automatically staked and will no longer earn staking rewards.”
Since the upgrade of Shapella (Shanghai + Capella) allows the withdrawal of Ethereum staked on the Beacon Chain to the execution layer, Kraken is withdrawing all staked ETH associated with their US retail customers.
Ethereum influencer and educator Anthony Sassano in a tweet noted on April 12 that Kraken is staking out ETH by leaving their validators. While validators can leave the Ethereum stake, their 32 ETH staked and consensus layer rewards will remain on the network until the Shapella (Shanghai+Capella) upgrade.
For clarity:
Validators can currently close, but the corresponding 32 ETH stake and consensus tier rewards cannot be withdrawn (aka moved) until Shapella goes live in about 12 hours
What Kraken is doing now is abandoning their validators
— sassal.eth 🦇🔊 (@sassal0x) April 12, 2023
Amid regulatory pressure from the SEC on staking services, Kraken and Coinbase are likely to remove staked ETH after the Shanghai upgrade. Coinbase and Kraken has staked 2.29 million and 1.25 million ETH on the platforms. It will have additional selling pressure on Ethereum.
Sell Liquid Staking Derivatives before the upgrade to Shanghai
Institutions and retail investors have started dumping Ethereum (ETH) and Liquid Staking derivatives (LSD) ahead of the Ethereum Shanghai upgrade. Lido DAO (LDO), Rocket Pool (RPL) and Frax Share (FRAX) prices fell 8%, 9% and 6% respectively. A prominent anonymous crypto trader Sisyphus sold more than $400,000 worth of Lido DAO (LDO) tokens and Blockchain Capital has sold more than 1.5 million LDO and 65,352 Rocket Pool (RPL) tokens today.
Ethereum price is trading at $1,908, down 2% in the last 24 hours. Meanwhile, Lido Staked ETH fell 2%, with the price currently trading at $1,885.
Also read: US CPI data: Inflation rose less than expected in March
Varinder is a technical writer and editor, technology enthusiast and analytical thinker. Fascinated by disruptive technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for quite some time and is currently covering all the latest updates and developments in the crypto industry.
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