Kraken, a prominent cryptocurrency exchange, has recently initiated a significant wave of withdrawal requests for their stakes in Ethereum (ETH) following the Shapella upgrade. The upgrade introduced the ability to withdraw ETH from the platform, resulting in an overwhelming influx of withdrawal requests exceeding $1.5 billion, including partial and complete exits.
Kraken’s Staking Service and Recent Settlement Charges
As a leading provider of a staking service that streamlines the Ethereum staking process, Kraken allows users to deposit into the platform and create validators on their behalf. However, this development comes on the heels of Kraken’s recent settlement of charges brought by the Securities and Exchange Commission (SEC) for allegedly failing to register the offer and sale of its staking program in the United States. Kraken has agreed to pay a $30 million fine to resolve the charges.
Kraken’s Withdrawal Requests and ETH Value
In response to this regulatory setback, Kraken has withdrawn a substantial amount of ETH from the network. According to data from Nansen, Kraken has requested to withdraw over 551,000 ETH, currently valued at $1 billion.
This represents more than 65% of the 820,000 ETH (approximately $1.5 billion) currently in the queue for withdrawal from the network. It’s important to note that the amount of ETH Kraken is withdrawing does not represent its entire stake but rather a portion of its 1.25 million ETH ($2.5 billion) staked on Ethereum.
Kraken’s Unstaking for U.S. Clients and Validator Exit Queue
Kraken had previously announced that it would automatically begin unstacking all ether for its U.S. clients in light of regulatory measures. However, despite Kraken’s request to exit its validator stakes, it is still subject to the validator exit queue wait time on the Ethereum network.
Kraken’s Position as Third-Largest Stakeholder on Ethereum
Kraken’s withdrawal of ETH is significant considering its position as the third-largest stakeholder on Ethereum, behind Lido Finance and Coinbase, as per the Dune Analytics dashboard. Once the withdrawal queue is processed in the next few days, Kraken is expected to slide into the second position as the most significant stakeholder on Ethereum.
Current Staking Balance on Ethereum and Impact of Shapella Upgrade
There are 17.4 million ether staked (excluding rewards) on the Ethereum network, accounting for approximately 15% of the total ether supply. Since the Shapella upgrade went live, the net staking balance has decreased by 94,581 ether, equivalent to $189 million based on Nansen data.
In conclusion, Kraken’s recent initiation of massive withdrawal requests for their stakes in Ethereum following the Shapella upgrade has garnered attention in the cryptocurrency community. As one of the most prominent stakeholders on Ethereum, Kraken’s actions are expected to impact the network significantly.
Kraken’s regulatory challenges and subsequent withdrawal of ETH highlight the evolving landscape of cryptocurrency regulations and their implications for market participants. As the situation continues to unfold, market participants and investors will closely monitor the Ethereum ecosystem developments.