Major crypto exchange Kraken has taken a leading position in the Ethereum (ETH) unstaking queue following the blockchain’s latest Shapella upgrade, with a number of market observers suggesting that the exchange’s dominance of the queue could be triggered by Kraken’s recent legal woes.
The Shanghai (Shapella) upgrade marks a significant milestone in Ethereum’s development, encompassing changes to the blockchain’s execution layer (Shanghai upgrade), consensus layer (Capella upgrade), and the Engine API.
This comprehensive upgrade enables ETH stakers to withdraw their staked crypto along with any accumulated staking rewards.
As of 09:00 a.m. UTC, Kraken accounted for approximately 63.2% of the ETH pending withdrawal, significantly surpassing its major competitors. Coinbase held a 10.8% stake, while Huobi maintained a 5.1% share, according to data from the blockchain analytics platform Nansen.
At that time, nearly 869,000 ETH, valued at over $1.8 billion, was awaiting withdrawal, with Kraken’s share exceeding $1 billion.
Kraken reaches agreement with SEC, eyes expansion
It is noteworthy that Kraken’s legal woes and its row with the U.S. regulator, the Securities and Exchange Commission (SEC), were likely to play a role in the latest development.
Last February, the American exchange reached an agreement with the agency under which Kraken agreed to stop offering staking services or programs to customers based in the U.S.
The SEC has accused the platform of failing “to register the offer and sale of their cryptoasset staking-as-a-service program” which the regulator treats as securities.
As part of its deal with the agency, Kraken also agreed to pay some $30 million in disgorgement, prejudgment interest, and civil penalties.
At the same time, the U.S. platform is also pursuing plans to launch its own bank, dubbed Kraken Bank.
Amid the ongoing banking crisis, Kraken hopes to create a new venture crypto through the Wyoming Special Purpose Depository Institution (SPDI) framework that is designed to allow the new bank to focus on asset custody and safekeeping.
“We’re building a better kind of crypto & Bitcoin bank for our clients,” Kraken said in a recent statement.
“We’re looking into products like deposit accounts in USD and crypto assets (ex. Bitcoin), multiple funding and payments options, institutional custody products (qualified custody for advisors and broker dealers), IRAs and many more,” according to the San Francisco-based exchange.