The U.S. Securities and Exchange Commission has taken a significant step in clarifying its stance on crypto staking, announcing that certain staking activities do not breach U.S. securities laws. This development, articulated in a staff statement released by the SEC’s Division of Corporation Finance late Thursday, brings a breath of fresh air to the crypto community, particularly those involved in proof-of-stake networks.
A Nod to Crypto Stakers
The SEC’s latest pronouncement appears to draw a line in the sand, distinguishing staking activities from those that might be considered securities offerings. The statement emphasizes that node operators, validators, and other entities participating in staking, whether independently or through third-party arrangements, are not engaging in the offer and sale of securities. This aligns staking’s treatment with that of mining, a consensus mechanism the SEC had previously clarified as not falling under securities laws. This perspective echoes sentiments from the Crypto Coalition’s assertion that staking is an ‘essential good’, not a security.
Lorien Gabel, CEO of Figment, a firm specializing in staking services, expressed relief over the clarity provided by the SEC. “The statement is surprisingly straightforward for such a nuanced subject,” Gabel noted. He highlighted the inclusion of ancillary staking services like insurance against slashing—a risk management strategy in staking—and the provision of modified unbonding periods as activities that won’t classify providers as asset managers.
Implications for the Crypto Ecosystem
This update from the SEC is not just a regulatory tidbit but a potential game-changer for the industry. Alison Mangiero, head of staking policy at the Crypto Council for Innovation, underscored the significance of this development. “The statement serves as a crucial reaffirmation that stakers will be treated similarly to miners. It’s a pivotal moment, especially considering the previous enforcement actions under former SEC Chair Gary Gensler that targeted staking services,” Mangiero explained. This aligns with recent calls from US crypto groups urging the SEC for clarity on staking.
The timing of the statement is notable, arriving just as the SEC is poised to make decisions on applications to incorporate staking into spot ether exchange-traded funds (ETFs). While ETF providers might have anticipated approvals, the SEC’s statement could accelerate the process, according to industry insiders like Gabel.
A Cautious Yet Optimistic Outlook
Despite the positive implications, the SEC’s statement comes with caveats. It explicitly applies to activities involving “Covered Crypto Assets” that don’t possess intrinsic economic properties, such as passive income generation or rights to future business profits. A footnote in the statement emphasizes that it is narrowly tailored and doesn’t carry legal force.
This nuanced approach reflects the SEC’s cautious navigation of the rapidly evolving crypto landscape, where definitive regulatory guidelines are scarce. The statement, therefore, represents an incremental yet meaningful stride in regulatory clarity.
Looking ahead, the crypto community will be watching closely to see how these clarifications influence broader regulatory frameworks and market behavior. Questions linger about whether this trend of regulatory leniency will continue and how it might shape the future of crypto staking and related financial products.
In essence, while the SEC’s statement marks a positive development for crypto staking, it also leaves the door open for further interpretation and refinement. As the industry evolves, so too will the regulatory frameworks guiding it, making this a space to watch in the coming months.
Source
This article is based on: Crypto Staking Doesn’t Violate U.S. Securities Law, SEC Says
Further Reading
Deepen your understanding with these related articles:
- The SEC Can Learn From the IRS in Making Regulation Simpler for Crypto
- Restaking can make DeFi more secure for institutional traders
- U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer (openai)
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
