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Very soon, Ethereum will be launching the Shangai Update, which will make it possible for investors, who have staked their tokens on the network to be able to withdraw their tokens.
It has been very difficult for investors to make withdrawals of their staked ETH tokens since 2020. However, this problem did not stop the deposit of about $33 billion worth of ETH tokens on the network. This difficulty in withdrawals of one’s token may be because funds have to be staked through intermediaries like Coinbase and Lido. Investors that have staked through these intermediaries will have to wait until the end of the agreed period before making withdrawals.
But with the new development on the Ethereum network, it is hoped that the withdrawal will be made easy. Lido said that withdrawal of ETH tokens through its platform will be possible one month after the Shangai update. According to them, this is to conduct audits and security checks. Coinbase has not made a clear statement as to when easy withdrawals will be possible for their users. However, they said it could take several months.
The Shanghai update is important because it completes ETH’s switch to a proof-of-stake network. However, neither the network’s economy nor how users interact with Ethereum should be significantly altered by the update.
Most of the money in the Ethereum staking contract has been traveling through the crypto ecosystem for a few years because the bulk of ETH is staked through intermediaries (with many of those releasing tokens that represent the staked ETH)
The Securities and Exchange Commission Becomes Interested in Scrutinizing Crypto Firms
While not much appears to be changing inside Ethereum itself, the political environment surrounding crypto is changing. The SEC is getting more active in bringing a lawsuit against crypto firms. There are growing concerns that Ethereum could get caught in this tussle as the SEC frequently files litigation against cryptocurrency companies like Coinbase and Binance.
Incidentally, on the same day, Ethereum transitioned to the proof-of-stake system, SEC, chairperson Gary Gensler made a statement about the Proof-of-stake system considering its securities
offerings due to the reward mechanism. That statement, in a way, points a finger in the direction of Ethereum. The network, being the second largest crypto by market cap, is an alluring temptation for the Securities and Exchange Commission.
There have been rumors that the SEC may use the ability to make withdrawals as proof that a securities agreement between ETH holders and the core Ethereum team, who carried out the update, has been fulfilled.
It seems improbable that the Securities and Exchange Commission will attempt to shut down the enormous Ethereum ecosystem. But keep in mind that any SEC action would lead to years of litigation before a resolution occurred and that this story is still worth watching.
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