A recent meeting between the U.S. Securities and Exchange Commission (SEC) and Everstake, a prominent player in the non-custodial staking arena, has spotlighted the murky regulatory landscape surrounding blockchain staking. This discussion, involving the SEC’s Crypto Task Force, underscores an urgent need for clarity, as the practice of staking—where digital assets worth over $193 billion are currently locked—remains entangled in legal ambiguity in the United States.
The Debate Over Staking as a Security
At the heart of the meeting was Everstake’s argument that non-custodial staking should not fall under the umbrella of securities transactions. In this model, users maintain control over their digital assets, merely delegating validation rights while retaining ownership—akin to leasing out a car without transferring the title. “Our main assertion is that staking is not a financial instrument or security transaction, but rather a technical process,” Everstake founder Sergii Vasylchuk explained, likening it to a fundamental protocol mechanism that ensures the integrity of decentralized networks.
The company’s stance hinges on the Howey test, a legal standard used to determine what constitutes a security. According to Everstake, non-custodial staking does not involve an investment of money in a common enterprise nor does it carry an expectation of profits derived from others’ efforts—a crucial distinction that places it outside the security classification. Margaret Rosenfeld, Everstake’s chief legal officer, emphasized that “with non-custodial staking, there’s no handover of assets, no investment contract, and no third-party risk.” This perspective aligns with broader industry sentiments, as detailed in Crypto Coalition Tells SEC Staking Is ‘Essential Good,’ Not a Security.
Regulatory Clarity: A Call to Action
In an April 8 letter to the SEC, Everstake urged the agency to provide clear guidelines on non-custodial staking, as well as custodial and liquid staking models. This plea aligns with Commissioner Hester Peirce’s call for industry input on blockchain services regulation. The firm argues that treating non-custodial staking as a securities offering could stifle innovation in the blockchain sector, potentially chilling the vibrant growth seen in recent years. For further insights into the industry’s push for clarity, see US crypto groups urge SEC for clarity on staking.
Despite the compelling arguments, the SEC has yet to carve out a definitive stance. The agency, under the current administration of pro-crypto President Donald Trump, has shown a willingness to engage with industry stakeholders, including those involved in non-custodial staking and broader blockchain infrastructure. However, as Rosenfeld noted, the SEC has not made specific commitments regarding staking guidance, leaving the industry in a state of anticipation.
The Wider Impact on the Crypto Ecosystem
The implications of this regulatory uncertainty stretch beyond Everstake. Nearly 30 crypto advocacy groups, led by the Crypto Council for Innovation, have also petitioned the SEC for clear guidance, highlighting the broader industry’s concern. The lack of clarity not only affects staking service providers but also impacts investors and developers who rely on regulatory stability to drive innovation.
As the SEC deliberates, the crypto community watches closely. The outcome of these discussions could shape the trajectory of blockchain innovation in the U.S., determining whether staking can continue to thrive or if regulatory constraints will curb its potential. For now, the industry remains on tenterhooks, awaiting the SEC’s next move and hoping for a resolution that balances innovation with investor protection.
In the meantime, the debate over staking classification remains a hot topic, with stakeholders actively contributing to the conversation. As the crypto landscape evolves, the dialogue around regulatory clarity will likely intensify, setting the stage for future developments in blockchain technology and its myriad applications.
Source
This article is based on: Everstake defends non-custodial staking as SEC weighs industry input
Further Reading
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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.
