On May 29, 2025, the U.S. Securities and Exchange Commission (SEC) took a major step forward in clarifying the regulatory status of proof-of-stake (PoS) protocol staking. In a statement from the Division of Corporation Finance, the SEC declared that most PoS staking activities are not considered securities transactions under U.S. federal law. This long-awaited statement could reshape the landscape for crypto staking in the United States and provide much-needed certainty for individuals and businesses in the industry.
Let’s break down what this statement means, how it could impact the future of crypto regulation, and why it’s such a pivotal moment for the staking ecosystem.
Understanding the SEC’s Stance on Staking
The SEC’s statement focuses on PoS protocol staking, where individuals lock up their crypto assets to help secure blockchain networks and receive rewards in return. According to the statement, these activities—such as solo staking, staking through a third-party validator, or using a custodial staking service—do not involve the offer or sale of securities under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Key Takeaways from the SEC’s Statement:
- Staking is not a security: The SEC clarified that staking rewards are compensation for providing a technical service—securing the network—rather than profits generated from someone else’s efforts. This means staking does not meet the criteria of an “investment contract” under the Howey test, which has long guided U.S. securities law.
- Broad application: The statement covers individuals who stake their own assets, non-custodial and custodial staking service providers, and third-party operators like validators, delegates, and custodians.
- Ancillary services don’t change the picture: The SEC also made clear that additional services tied to staking—such as slashing insurance, early unbonding, or alternative reward structures—are administrative or operational. They do not turn staking into a securities transaction.
- Custodial staking isn’t a securities transaction: Even when a third party manages staking on behalf of users, it’s still not considered a securities offering because the custodian simply acts as an agent, not a central manager.
- Important limitations: The statement doesn’t cover all staking models. It explicitly excludes liquid staking and restaking, areas that remain unaddressed and potentially subject to future regulatory scrutiny.
Why This Matters for Staking Participants
For individuals and companies involved in staking, this statement brings immediate and welcome relief. Before this clarification, there was significant uncertainty about whether offering staking services or even participating in staking could be considered an unregistered securities offering—a serious risk that might attract SEC enforcement.
Now, U.S. stakers can feel more confident that their activities—if they are limited to protocol staking—don’t run afoul of securities laws. This opens the door for broader participation, as individuals and companies no longer need to worry about inadvertently violating federal securities regulations just by helping to secure blockchain networks.
🇺🇸 JUST IN: The SEC's Division of Corporation Finance released a statement that clarifies certain proof-of-stake protocol staking activities do not constitute securities transactions. pic.twitter.com/IWetADGNCQ
— Cointelegraph (@Cointelegraph) May 30, 2025
Encouraging Growth and Confidence in Crypto
The SEC’s statement does more than just remove a cloud of uncertainty. It also has the potential to boost confidence in the U.S. crypto industry, especially for staking-focused projects and platforms.
By recognizing staking as a technical process rather than an investment scheme, the SEC’s staff interpretation aligns with how many in the industry view PoS networks. This could help reinvigorate innovation and attract new participants—from retail investors to institutions—who had previously been wary of staking in the U.S. due to regulatory concerns.
Moreover, with this regulatory clarity, projects that rely on staking—like decentralized finance (DeFi) protocols and staking-as-a-service platforms—can move forward without fear of triggering securities laws, at least for the staking activities explicitly covered by the statement.
A Major Step, But Not the Final Word
While this statement marks a significant milestone, it’s important to understand its limitations. The statement itself notes that it has “no legal force or effect.” In other words, it’s a staff interpretation, not a formal rule or binding regulation.
This means the statement doesn’t override existing laws, court decisions, or future SEC enforcement actions. If staking practices are challenged in court, the outcome could still differ from the SEC staff’s current view. And since the statement doesn’t cover liquid staking or restaking, those areas remain in regulatory limbo.
The SEC’s statement has also sparked debate within the agency itself. Commissioner Hester Peirce praised it as long-overdue clarity for staking participants, while Commissioner Caroline Crenshaw criticized it for conflicting with past court decisions and the traditional application of the Howey test. This internal debate signals that regulatory certainty could shift again depending on future SEC leadership or judicial rulings.
Broader Implications for the U.S. Crypto Sector
Despite these caveats, the SEC’s move is widely seen as a positive development for the broader U.S. crypto industry. It removes a major regulatory barrier to staking adoption and encourages network security by making it easier for participants to contribute to PoS blockchains.
With staking now recognized as a technical service rather than an investment contract, U.S. crypto companies may find themselves better positioned to compete globally. The statement could also inspire more innovative financial products—like staking-enabled ETFs—because it reduces the risk of SEC pushback for these types of offerings.
At the same time, the statement underscores the need for comprehensive, formal digital asset regulation. While staff interpretations are helpful, they don’t offer the same level of legal certainty as laws or binding SEC rules. The crypto industry—and many policymakers—are likely to continue pushing for more permanent solutions to fill this regulatory gap.
Conclusion: A Pivotal Moment for Staking
In summary, the SEC’s statement clarifying that most PoS protocol staking activities are not securities transactions represents a pivotal moment for the crypto sector in the U.S. It’s a clear sign that the SEC is willing to acknowledge the technical realities of staking and provide some much-needed regulatory clarity for participants.
However, because this is a staff interpretation—not a legally binding rule—some questions remain, particularly for newer forms of staking that aren’t covered. Still, this is a crucial step in creating a more supportive environment for staking and crypto innovation in the United States.
