Starknet Excludes U.S. In Rewards Plan Amid Regulatory Fears
- Starknet has unveiled plans to distribute STRK tokens to early contributors.
- These plans, however, exclude U.S. users.
- The decision comes amid continued regulatory uncertainty in the U.S.
Starknet looks set to take a page from the airdrop playbook. On Monday, October 30, the Starknet Foundation, saddled with the responsibility of fostering a community around the eponymous network and overseeing its development, announced that it has allocated 50 million STRK tokens to reward early contributors. However, there is a significant caveat in its disclaimers.
U.S. Sidelined
In the Monday announcement , the Starknet Foundation disclosed that the earmarked tokens would go to reward members of the community who have contributed to technical discourse, organized events, and routinely published Starknet-branded content. However, per its disclaimer, U.S. residents and citizens are not eligible for this reward.
"No person who is a citizen of, resident (tax or otherwise) of, green card holder of, incorporated in, owned or controlled by a person or entity in, located in, or has a registered office or principal place of business in the United States (defined as a 'U.S. person'); no person who is acting for the account or benefit of any U.S. person; and no persons in any jurisdiction in which such offer, sale, holding, and/or purchase of digital assets or cryptocurrencies is unlawful, prohibited, or unauthorized (together with U.S. persons, a 'Restricted Person') is eligible to receive STRK tokens," the disclaimer read.The Starknet Foundation further asserted that it prohibits the offer, sale, and delivery of STRK in the U.S.
A member of the foundation did not immediately respond to a request for comment, but the move comes as crypto firms and projects remain wary of the uncertainty surrounding the classification of crypto assets in the U.S.
Rugged Terrain
In recent years, the U.S. has become a rugged terrain for crypto projects and firms, as the Gary Gensler -led SEC maintains that most crypto assets are unregistered securities and traditional securities laws are sufficient to guide the industry.
Based on these assertions, the agency has launched costly enforcement actions against crypto firms and projects. In May 2023, Ripple CEO Brad Garlinghouse claimed the firm had spent $200 million in its legal battle with the SEC. While the crypto behemoth contends that it is capable of sticking the fight to the regulator, not all firms can boast of the same deep pockets.
On October 20, LBRY Inc. revealed that it was abandoning its appeal of the SEC case and shutting down amid growing debt taken to fight its two-year-long legal battle with the regulator.
On the Flipside
- Starknet is not the first project to exclude U.S. citizens from token distributions. In February 2023, Blur also made the same decision with its airdrop.
- STRK tokens are not yet tradable.
Why This Matters
At the time of writing, L2Beat data shows that Starknet is the seventh largest Ethereum Layer 2 scaling solution by TVL with $134 million. The foundation’s decision to exclude U.S. users from its rewards plan underscores the impact of the SEC’s enforcement stance on crypto users in the U.S.
Read this to learn more about Starknet’s STRK token:
StarkNet Deploys Its STRK Token On Ethereum (ETH) Mainnet
Learn more about how Bitcoin ETF optimism is driving crypto inflows:
Crypto Inflows Skyrocket Amid Bitcoin ETF Optimism
Disclaimer: everything in the article represents the author's point of view and has nothing to do with this platform. This article is not intended to be used as a reference for making investment decisions.
