Ethereum\u2019s native token, Ether (ETH<\/a>), saw its worst daily performance of the year as the United States Securities and Exchange Commission (SEC) stopped Kraken, a cryptocurrency exchange, from offering crypto staking services.<\/p>\n On Feb. 9, Kraken agreed to pay $30 million<\/a> to settle the SEC\u2019s allegation that it broke securities rules by offering crypto staking services to U.S. retail investors.<\/p>\n In particular, the news pushed down the prices of many proof-of-stake (PoS)<\/a> blockchain project tokens. Ethereum, which switched to a staking-based<\/a> protocol in September 2022, also suffered.<\/p>\n On Feb. 9, ETH\u2019s price plunged nearly 6.5% to around $1,525, the largest single-day decline since Dec. 16 of last year.<\/p>\n The SEC’s crackdown on crypto staking begins as Ethereum awaits the release of its key network upgrade, dubbed Shanghai<\/a>, in March.\u00a0<\/p>\n The update will finally allow Ether validators \u2014 entities that have locked<\/a> approximately $25.6 billion worth of ETH tokens in Ethereum\u2019s PoS smart contract \u2014 to withdraw their assets alongside yield rewards. <\/p>\n As a result, multiple analysts, including Bitwise Asset Management\u2019s chief investment officer, Matt Hougan, consider Shanghai a bullish event for Ether.<\/p>\n \u201cToday, many investors who would like to stake ETH and earn yield are sitting on the sidelines. After all, most investment strategies can\u2019t tolerate an indefinite lock-up,\u201d wrote<\/a> Hougan in his letter to investors in January, adding: <\/p>\n \u201cSo, most investors stay out of the market. But once that indefinite lock-up is removed, the percentage of investors willing to stake their ETH will explode.\u201c<\/p><\/blockquote>\n But doubts have been emerging about the future of crypto staking in the U.S., with Brian Armstrong, the CEO of Coinbase crypto exchange, fearing that the SEC would ban<\/a> staking for retail investors in the future.<\/p>\n 1\/ We’re hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.<\/p>\n \u2014 Brian Armstrong (@brian_armstrong) February 8, 2023<\/a><\/p><\/blockquote>\n Moreover, some analysts argue that banning Ether-staking services will force users to move away from Ethereum.<\/p>\n Notably, Ethereum requires stakers to deposit 32 ETH (~$50,000) into its PoS smart contract to be a validator. As a result, retail investors often use\u00a0third-party staking services<\/a>\u00a0that pool smaller amounts of ETH to enable validator status.\u00a0<\/p>\n \u201cIf the SEC bans crypto staking for the public, then a majority of Ethereum validators will have to come down,\u201d argues<\/a>\u00a0independent analyst Ripple Van Winkle, adding: <\/p>\n \u201cBecause you need 32 ETH to stake. Which means the ETH network is going to experience issues.\u201c<\/p><\/blockquote>\n From a technical perspective, Ether price is positioned for a potential 20% price correction in February.<\/p>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-02\/70a2c444-ab21-4f4a-a161-96a408ff70a1.png\")
Will Ethereum staking survive the SEC crackdown?<\/h2>\n
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ETH price sees bearish rejection<\/h2>\n
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