SEC Staff Rules Out Security Status for Staking on Proof-of-Stake Blockchains
The US Securities and Exchange Commission has clarified that staking on certain proof-of-stake blockchains does not constitute a securities transaction under federal law, offering long-awaited relief to crypto investors and service providers.
The SEC’s Division of Corporation Finance released the statement on Thursday, easing regulatory fears that had discouraged participation in staking networks.
Staking, which allows users to lock up cryptocurrency to help validate blockchain transactions and earn rewards, has existed in a legal gray zone. Many in the industry have feared that offering or participating in staking could be interpreted as an unregistered securities offering.
SEC Exempts Key Staking Functions from Securities Designation
The new statement confirms that individuals who self-stake eligible crypto assets and companies offering non-custodial or custodial staking-as-a-service are not engaging in securities transactions, as long as the activity centers around network consensus.
According to the SEC staff, bundling additional features, such as slashing protection, early withdrawal options, alternative reward structures or asset aggregation — also does not convert the activity into a regulated securities offering.
Over 30 Crypto Firms Urged SEC To Provide Clarity
The clarification comes as pressure from the crypto industry continues to build. In April, the Crypto Council for Innovation, a public policy group, sent a letter to the SEC urging it to deregulate staking.
The letter, signed by more than 30 crypto organizations, asked the agency to recognize staking as a “technical process” rather than an “investment activity.” It also called for clear guidelines, warning that overly strict rules could freeze market structures and stifle innovation in the staking space.
Commissioner Hester Peirce, a long-standing advocate for clearer crypto regulation, welcomed the update. She said the lack of clarity had “artificially constrained participation” in proof-of-stake networks. As a result, it had weakened decentralization and reduced the broader utility of blockchain systems in the US.
The SEC’s stance follows its earlier position on proof-of-work mining. In that case, the agency also found the activity did not amount to a securities transaction.
Although the statement is not legally binding, it offers valuable insight into the SEC’s evolving view on crypto activities. It may also set the stage for more formal guidance in the future.
For now, the clarification is expected to boost confidence among staking participants and service providers seeking to operate within the US legally.
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