As the company continues its push into the U.S. market, Luxembourg-based Bitstamp is set to introduce its Bitstamp Earn product to American investors.
The product, which is already available to Bitstamp’s non-U.S. customers, is meant to be a turn-key Ethereum (ETH) and Algorand (ALGO) staking solution. Investors fund their Bistamp accounts and then collect staking rewards. For its part, Bitstamp takes a fee on the yield customers earn.
Very importantly, U.S. CEO Bobby Zagotta told Decrypt, that the yields are not generated through lending like other high-interest crypto accounts.
“This offering is staking, pure and simple. We’re not into a lending product in the U.S. and as such, you know, it’s a protocol-driven set of rewards,” Zagotta told Decrypt. “We don’t have discretion over how those rewards are created. We’re not moving people’s funds or making investments. So it’s very, very far removed from what some of the lending companies like BlockFi have done.”
Bitstamp and crypto lending
BlockFi, a New Jersey-based crypto rewards platform, and Celsius, its London-based competitor, drew the ire of the SEC earlier this year.
The companies were ordered to stop offering their high-interest accounts to U.S. customers after the regulator alleged they were actually unregistered securities.
BlockFi has since reached a $100 million settlement with the SEC and restructured its product offerings. Meanwhile, Celsius has been redesigning its product to pass muster with regulators.
Although Bitstamp has made sure to steer clear of offering accounts that generate yields from lending, it does still have more work to do with regulators. At launch, customers in Alabama, Idaho, Hawaii, Louisiana, Nevada, New Jersey, and New York will not be able to participate.
That list includes several of the states, like Alabama and New Jersey, that have been critical of BlockFi and Celsius.
Zagotta said he’s confident Bitstamp’s Earn product will have room to grow in the states. This year is set to be a big one for the company’s U.S. team.
“We've been in building mode. We’ve doubled our [U.S.] staff and we have kind of relayed out the product roadmap,” Zagotta said. “And so there will be more announcements, both in the form of tokens available for listing in the U.S., but then also other Earn-like offerings that will enable people to do more with their assets.”