The U.S. Securities and Exchange Commission (SEC) has issued a landmark clarification, stating that crypto staking on proof-of-stake (PoS) blockchain networks does not constitute a securities transaction under federal law.
Released on May 29 by the SEC’s Division of Corporation Finance, this guidance provides much-needed clarity for the cryptocurrency industry, affirming that staking activities like self-staking and custodial staking are not securities offerings.
However, the SEC cautioned that certain models, such as liquid staking, may still fall under securities regulations. The announcement has sparked optimism across the crypto sector, with experts predicting increased participation in PoS networks and potential growth in innovative financial products. Amid a broader shift toward a more crypto-friendly regulatory stance, this move signals a pivotal moment for blockchain technology in the U.S.
SEC’s Guidance on Staking
The SEC’s notice clarifies that staking rewards in PoS networks are compensation for services provided by node operators, not profits derived from others’ efforts, a key criterion in the Howey Test used to define securities.
This applies to self-staking, self-custodial staking, and custodial staking, offering reassurance to individual and institutional participants. However, the agency highlighted that liquid staking and restaking, where third parties manage staked assets, could still be subject to securities laws due to profit expectations tied to external efforts.
Recent updates indicate that this distinction aligns with the SEC’s ongoing efforts to differentiate between decentralized blockchain activities and centralized financial products, providing a clearer framework for compliance.
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Industry and Regulatory Reactions
The crypto community has largely embraced the SEC’s guidance, with SEC Commissioner Hester Peirce, head of the agency’s Crypto Task Force, praising it as a step toward fostering decentralization.
She noted that prior regulatory uncertainty had stifled participation in PoS networks, hindering blockchain innovation. Conversely, Commissioner Caroline Crenshaw criticized the advisory, arguing it understates the risks of crypto products to investors.
Industry analysts suggest the clarification could boost staking participation, with Ethereum’s staking market alone valued at over $100 billion in 2025, reflecting significant growth potential for PoS ecosystems.
Evolving Regulatory Landscape
The SEC’s stance on staking mirrors its earlier position on proof-of-work mining, which it also deemed non-securities activity, reinforcing consistency in its approach to blockchain operations.
This development follows the SEC’s recent decision to drop its enforcement action against Binance, signaling a more accommodating regulatory environment under the current administration.
Industry observers note that the SEC is working to establish tailored rules for digital assets, with recent proposals for crypto-specific regulations gaining traction. The clarification is expected to encourage the development of new financial products, such as staking-integrated crypto exchange-traded funds (ETFs), which could attract institutional investors.
Did You Know?
Over 30% of Ethereum’s total supply, approximately 36 million ETH, is currently staked in its PoS network, securing transactions and earning rewards for validators.
Implications for the Crypto Market
The SEC’s guidance is poised to reshape the crypto landscape by removing regulatory hurdles for PoS networks, which power major blockchains like Ethereum and Cardano. Increased participation could enhance network security and decentralization while fostering innovation in financial products.
Market data indicates that staking rewards have grown steadily, with annual yields for major PoS networks ranging from 3% to 10% in 2025. As the SEC continues to refine its approach, crypto firms are expected to align their operations with federal laws, capitalizing on new opportunities while navigating the complexities of evolving regulations.
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