SEC Says Proof-of-Stake Staking Is Not a Securities Transaction, Offering Clarity for U.S. Crypto Market
In a move that could reshape the regulatory landscape for digital assets in the U.S., the Securities and Exchange Commission’s Division of Corporation Finance clarified Thursday that certain staking activities on proof-of-stake (PoS) blockchain networks do not constitute securities transactions.
In its statement, the Division noted that “participants in Protocol Staking Activities do not need to register with the Commission transactions under the Securities Act,” provided the assets in question are “covered crypto assets.” This clarification offers a clear distinction for activities like self-staking, using custodians or node operators, and staking through third-party services.
The announcement is the SEC’s latest effort to bring regulatory clarity to the crypto sector, which has long struggled with ambiguous guidelines. The ruling specifically applies to staking operations across PoS blockchains, including activities facilitated by custodians who stake on behalf of asset owners and self-custodial arrangements involving third parties.
Importantly, the SEC emphasized that these staking activities do not involve financial instruments under the legal definition of a security. This assessment was based on the Howey Test, a legal benchmark used to determine whether a transaction qualifies as an investment contract.
SEC Commissioner Hester Peirce welcomed the announcement, calling it “a much-needed clarification” for both individual stakers and companies offering staking-as-a-service. “Providing security is not a security,” she said, highlighting the functional role staking plays in blockchain ecosystems rather than as a financial investment vehicle.
The decision could have significant implications for the future of crypto investment products in the U.S. Rebecca Rettig, chief legal officer at Jito Labs, noted that the ruling could pave the way for more crypto ETFs to include staking features, giving investors broader access to blockchain-based yield opportunities.
The update comes amid a noticeable shift in the SEC’s tone since former Chair Gary Gensler’s departure. Earlier this year, the Commission clarified that proof-of-work mining also falls outside the scope of securities regulation. Under Gensler’s leadership, the SEC had targeted staking services at major platforms including Coinbase, Kraken, and MetaMask.
Not all commissioners are aligned, however. Commissioner Caroline Crenshaw criticized the Division’s statement, arguing that it presents an “incomplete picture” of the legal landscape and downplays the risks staking services may pose to retail investors.