Kraken Leads In Transactions Freeing ETH With 63% After Shanghai Upgrade

US crypto exchange Kraken has initiated withdrawal requests for their holdings following a Shapella upgrade introducing ether (ETH) withdrawals.

The Shanghai upgrade (Shapella) is one of the most critical upgrades this year for the 2nd most extensive network of the Ethereum market. This upgrade combines changes to Ethereum’s execution layer (Shanghai upgrade), consensus layer (Capella upgrade), and the Engine API. The Shanghai upgrade to the execution layer is a significant milestone in Ethereum’s roadmap. The upgrade enables stakers to withdraw their staked ETH and any accumulated staking rewards.

The upgrade resulted in massive withdrawal requests, surpassing $1.5 billion, including partial and full exits. Kraken offers a staking service that streamlines the Ethereum staking process, allowing users to deposit funds into the platform and create validators on their behalf.

This result comes after the Securities and Exchange Commission settled its claims against Kraken for allegedly failing to register the offer and sale of its staking program in the United States. Kraken consented to shell out $30 million in fines.

As a result, Kraken has asked to withdraw more than 556,000 ETH from the network, which is more than 63.3% of the 868,000 ETH in the network’s withdrawal queue.

Previously, the exchange had pledged that it would automatically start releasing all ether to its US customers due to regulatory measures. Despite the Kraken validator’s staking exit requirements, it is still subject to the wait time of the validator exit queue on Ethereum.

Currently, 17.4 million ether is staked (excluding rewards) on the Ethereum network, representing 15% of the total ether supply. Since the Shapella upgrade went live, the net staking balance has decreased by 97,510 ETH, based on Nansen’s data.

According to a study from CryptoQuant, up to 60% of ETH stakes in the blockchain are lost, so the pressure is on Shanghai, experts say. The sale from this event is insignificant, and if it does, it will only be the staking reward, not the entire capital and interest.

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