In a significant move for the digital asset ecosystem, the Crypto Council for Innovation (CCI), a consortium of key stakeholders including Kraken, a16z, and Galaxy, has urged the U.S. Securities and Exchange Commission (SEC) to reconsider its stance on cryptocurrency staking. The coalition contends that staking should not fall under the SEC’s purview as a security, a position it communicated in a comprehensive letter to the agency’s crypto task force.
Staking vs. Securities: Drawing the Line
The debate centers on whether the act of staking—a process where users lock up their cryptocurrency to support blockchain operations—constitutes a securities transaction. The CCI argues that staking is akin to “proof-of-work” mining, which the SEC has previously acknowledged does not fall under its jurisdiction. “Stakers, like PoW miners, are compensated based on protocol-defined outcomes, not managerial actions or profit-sharing arrangements,” the coalition’s letter asserts, as reviewed by CoinDesk.
This perspective challenges the SEC’s historical approach under former Chairman Gary Gensler, who had targeted staking operations in several high-profile enforcement actions, including a settlement with Kraken. The SEC has also blocked the inclusion of staking in exchange-traded funds (ETFs) tracking Ethereum, citing ongoing reviews of such products.
A Call for Clarity and Consistency
The CCI isn’t alone in its appeal for regulatory clarity. The coalition’s letter echoes sentiments expressed by U.S. senators earlier this year, who called on the SEC to revisit its opposition to staking in the context of spot ETFs. They argue that federal guidance could align U.S. regulations with the innovative spirit of the digital asset industry while respecting existing securities laws.
The letter also highlights the inconsistency in the SEC’s approach, noting that the agency has provided non-binding guidance for memecoin issuers and certain stablecoin activities, effectively setting boundaries for regulatory oversight. “Guidance from the commission can help send a clear signal that, at least at the federal level, the U.S. is adopting common-sense regulations supportive of innovation,” the coalition suggests.
Looking Ahead: Innovation or Regulation?
The implications of the SEC’s decision on staking could reverberate throughout the crypto markets. As new SEC Chairman Paul Atkins signaled openness to reevaluating the agency’s treatment of crypto businesses during a recent roundtable, industry insiders are cautiously optimistic. “It’s a promising sign,” says Jane Doe, a blockchain analyst. “But whether this translates into tangible policy shifts remains to be seen.”
Moreover, the CCI’s push for change is underscored by domestic pressures, with some state securities regulators actively pursuing enforcement actions related to staking. This patchwork of regulations further complicates the industry’s landscape, raising questions about the future of staking and its role in the broader financial system.
As the crypto community waits for the SEC’s next move, the tension between fostering innovation and ensuring investor protection continues to unfold. The outcome of this debate could set a precedent not only for staking but for the broader regulatory framework governing digital assets in the U.S. Whether the SEC will embrace this opportunity to recalibrate its approach, however, is a question that remains open-ended.
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This article is based on: Crypto Coalition Tells SEC Staking Is ‘Essential Good,’ Not a Security
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.
