Kraken recently announced that it is allowing the withdrawal of all staked Ethereum (ETH) after the completion of the Shapella upgrade. Kraken previously participated in validator staking, whereby it held over 2.29 million ETH, making it one of the largest ETH staking operations in existence at the time. Shapella is a fully decentralized update intended to alleviate potential hiccups in the network due to high throughput efficiency and scalability.

The Securities and Exchange Commission (SEC) had put forward accusations against Kraken back in February 2021 that they were running an unregulated crypto-asset staking-as-a-service business in the US. As a result, Kraken has temporarily halted staking operations, except for the stored ETH. With the Shapella upgrade, Kraken has granted its customers permission to withdraw all staked ETH.

According to Glassnode, a well-known on-chain intelligence platform, the Shanghai hard fork has 180,000 ETH in staking incentives as well as 70,000 ETH staked as of April 11, 2021. This would imply that with the completion of the hard fork, 170,000 ETH could become available for withdrawals. Despite the vast number, the depositers are not likely to release a large percentage all at once, as a few restrictions are in place to balance the market.

With the SEC looking for potential blockchain violations, it is expected that traders from not just Kraken but Coinbase, who is reported to be staking 1.25 million ETH, could create further selling pressure on Ethereum. With such an event in the making, it will be interesting to see how this plays out in the market, considering that Ethereum is currently trading at a price of $2,372.



Other News from Today