In a pivotal turn for the crypto industry, the U.S. Securities and Exchange Commission (SEC) staff has declared that staking on proof-of-stake (PoS) blockchains isn’t considered a security. This announcement, made on May 29, 2025, brings a sigh of relief to crypto enthusiasts and stakeholders who have been seeking regulatory clarity amid increasing scrutiny from federal regulators.
A Breath of Fresh Air for Stakers
Support for this guidance comes from SEC Commissioner Hester Peirce, known for her pro-crypto stance. Peirce asserts that the move provides much-needed clarity for stakers, who have been navigating a murky regulatory environment. “Staking is a fundamental aspect of many PoS blockchains, and it’s crucial for us to offer clear guidance,” Peirce emphasized in a recent statement. Her comments resonate with the broader crypto community, which has long been advocating for a consistent regulatory framework. This sentiment echoes the views expressed by various crypto groups urging the SEC for clarity, as detailed in US crypto groups urge SEC for clarity on staking.
But not everyone at the SEC is on the same page. Commissioner Caroline Crenshaw voices a contrasting view, suggesting that the guidance overlooks existing legal frameworks. Crenshaw argues that staking activities might still fall under the jurisdiction of securities laws, raising questions about the potential need for further regulatory oversight.
The Ripple Effect on the Crypto Market
This decision comes at a time when the blockchain landscape is experiencing rapid evolution, with platforms like Ethereum leading the charge after its transition from proof-of-work to proof-of-stake through “The Merge” in September 2022. The PoS model, which allows users to earn rewards by locking up their crypto holdings, has gained popularity due to its energy efficiency and potential for high returns.
Industry insiders are weighing in on the implications of the SEC’s position. “This is a significant step towards legitimizing staking as a viable financial activity,” notes Alex Thompson, a blockchain analyst at Crypto Insights. “It could encourage more institutional participation, which has been somewhat hesitant due to regulatory uncertainties.” This aligns with the arguments made by the crypto coalition, which has consistently advocated that staking is an ‘essential good’ rather than a security, as explored in Crypto Coalition Tells SEC Staking Is ‘Essential Good,’ Not a Security.
Yet, the guidance isn’t without its complexities. While it clarifies the status of staking, it leaves room for interpretation regarding how individual projects might be assessed. This ambiguity could lead to varied interpretations and enforcement actions, depending on the evolving landscape.
Navigating the Regulatory Terrain
For crypto platforms, this guidance presents both opportunities and challenges. Platforms like Lido and EigenLayer, which specialize in staking services, stand to benefit from the increased interest and participation. However, they must remain vigilant and adaptable to any future regulatory changes.
In the broader context, this development highlights the ongoing push and pull between innovation and regulation in the crypto space. While the SEC’s stance might ease some concerns, it also underscores the complexity of regulating a rapidly evolving industry that often defies traditional categorizations.
Looking ahead, the SEC’s guidance may set a precedent for international regulators, who are also grappling with how to approach staking and other emerging crypto activities. As the global regulatory landscape continues to evolve, stakeholders will need to stay informed and agile to navigate the changes effectively.
The road ahead is anything but straightforward. The SEC’s announcement is a step toward clarity, but as the crypto world knows all too well, nothing is set in stone. The coming months will likely bring further developments, debates, and, undoubtedly, a few surprises.
Source
This article is based on: Crypto staking on proof-of-stake blockchains not a security: SEC staff
Further Reading
Deepen your understanding with these related articles:
- The SEC Can Learn From the IRS in Making Regulation Simpler for Crypto
- UK’s FCA Seeks Public and Industry Views on Crypto Regulation
- 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.
