Ethereum staking volume surpasses withdrawal volume post-Shapella upgrade

The Ethereum blockchain underwent a critical Shapella upgrade on April 12, marking a milestone in the history of the blockchain. The upgrade enabled validators to withdraw their staked Ether (ETH) from the Beacon Chain after three years, opening up the possibility of mass selling. However, the latest data suggests that most validators are choosing to restake their unlocked Ether, contributing to an increase in staked ETH volume.

According to the on-chain analytics firm Nansen, as of April 17, the ETH staking volume of 124,000 ETH exceeded the withdrawal volume of 64,800 ETH for the first time since the Shapella upgrade. In the last 24 hours, the amount of staked ETH was 94,968 against 27,076 in withdrawals. Notably, the first round of withdrawals primarily consisted of partial withdrawals from Lido and old validators, and it takes approximately three days to get into the withdrawal queue.

The Shapella upgrade was a make-or-break situation for the Ethereum blockchain, with millions in unlocked ETH posing a risk of mass selling. However, the data shows that the majority of validators are choosing to restake their unlocked Ether. Crypto exchange Binance is set to open withdrawals on April 19, which could lead to further changes in staked and withdrawal volumes.

Out of the 1 million withdrawn ETH, three addresses restaked a total of 19,844 ETH, suggesting that validators are actively choosing to remain invested in the blockchain. Three addresses transferred ETH to centralized exchanges (CEXs) after withdrawal, with 71,444 ETH sent to different exchanges. Other whales did the same, with some sending it to Huobi staking addresses and a few others to CEXs, according to data shared by Lookonchain.

While some validators, like Kraken, had to exit to comply with a United States Securities and Exchange Commission ruling, the majority of early withdrawals are staking rewards. Currently, 22,231 validators have signed up for a complete exit out of 574,624, while 910,930 ETH of the 18.6 million staked ETH is slated to be withdrawn.

One of the reasons for the decrease in withdrawals could be attributed to the current price of ETH. The average price of staked ETH is about $2,137, which suggests that validators are choosing to hold their assets rather than selling them at current prices.

In conclusion, the Shapella upgrade has been a success for the Ethereum blockchain, with the majority of validators choosing to remain invested in the platform. While some early withdrawals were staking rewards, the majority of validators are restaking their unlocked Ether, which has contributed to an increase in staked ETH volume. As the situation continues to evolve, it will be interesting to see how the balance between staked and withdrawn ETH evolves over time.


Tagged : / / / / /

OKX to Halt Services in Canada Due to New Regulations

OKX is a cryptocurrency exchange that was launched in China in 2017 and facilitates trading in a number of different digital assets. Bitcoin, Ethereum, and Litecoin are some of the cryptocurrencies that are included in this category. As a result of the fact that its daily trading volume is more than $2 billion, it is regarded as being one of the most significant cryptocurrency exchanges in the whole world.

On February 22, 2023, the Canadian Securities Administrators (CSA) issued a notice requiring all cryptocurrency exchanges to make new legally enforceable undertakings while they wait to be registered with the regulatory body. The notification was published online. Due to the publication of this notification, the cryptocurrency exchanges have made the decision to put an end to their business activities in Canada. The new initiative makes it illegal to “purchase or deposit Value Referenced Crypto Assets (often referred to as stablecoins) via crypto contracts without the prior written authorization of the CSA.” This action is described as “purchasing or depositing Value Referenced Crypto Assets” in the original sentence.

The decision made by the CSA is a part of a bigger crackdown on trading cryptocurrencies in Canada, which is being carried out by authorities in an attempt to bring the sector under greater control. The authorities’ motivation for carrying out this crackdown is stated in the following sentence: At the present, cryptocurrency exchanges are obliged to first register with the regulating authorities of Canada in order to be able to accept new clients from inside the country’s borders. On June 22, 2022, after an investigation by the Ontario Securities Commission found that both ByBit and KuCoin were operating “non-compliant platforms” in the country, the commission fined both companies millions of dollars because they were “non-compliant platforms.” The investigation was conducted by the Ontario Securities Commission.

OKEx has said that it would only be temporarily withdrawing its services from the Canadian market and that it is now working with the relevant authorities in Canada to find a solution to the issue. The exchange has not issued any indication as to when it believes it will resume operations in Canada, and it has not specified a specific date either.


Tagged : / / / / /

Huobi imposes 24 hr crypto withdrawal delay to dampen speculation

Huobi Global, currently the world’s second-largest crypto exchange by daily traded volume, has introduced a 24-hour token withdrawal delay for all over-the-counter (OTC) trades. 

The decision strikes a blow to all Huobi users, some of whom will moreover be prevented from withdrawing their tokens for as long as 36 hours if the exchange’s assessment system judges them to be at particularly high risk. Huobi has said the move forms part of its attempt to “gradually introduce a number of risk control strategies encompassing a larger section of users.” It adds that it expects the delay to “effectively avoid user losses caused by the inflow of risky funds and protect the safety of users’ assets.”

Notably, Huobi had been implementing a narrower version of this measure since August last year, when it first imposed a token withdrawal delay of up to 36 hours on specific, higher-risk users. 

The new, more comprehensive initiative seems to align squarely with Beijing’s ongoing and multi-pronged crackdown on the country’s cryptocurrency investors, which has recently targeted the mining sector, banking services and crypto’s online footprint. In response to these restrictions, a large volume of crypto trading in the country has shifted to the OTC market, which is relatively unregulated and ensures that the transfer of fiat currency does not take place directly on exchanges’ trading desks.

High levels of activity on the OTC market during regulatory clampdowns are an established pattern in China: back in 2017, when Beijing first took action against crypto exchanges, investors had similarly adapted by making the shift to OTC trades. Huobi itself first rolled out its OTC service in Nov. 2017 amid a series of ever-tighter restrictions on crypto trading in the country.

Related: Huobi bans crypto derivatives trading for users in China

Today’s news goes against some analysts’ predictions, who had expected Beijing to take a lighter-touch approach to OTC trading given that the sector is judged to pose lower capital flight risks than regular exchanges. Yet the South China Morning Post today reported that the OTC sector is perceived by the authorities to be a gateway for both capital outflows and money laundering, as well as a spur to high volatility in the crypto markets.

Late last month, Huobi updated its user agreement document, banning crypto derivatives trading for all existing customers in China and a host of other jurisdictions. Earlier in June, the platform had already intervened to prevent new users from trading derivatives in parallel to reducing the allowable trading leverage from 125x to less than 5x.