SEC Staff Delivers Landmark Ruling: Staking on PoS Blockchains Not Securities

In a move that sent shockwaves through crypto circles, SEC staff issued a rare green light—staking rewards on proof-of-stake networks won’t be treated as securities. Finally, some regulatory clarity that doesn’t require a team of lawyers to interpret.

The decision effectively bypasses years of industry uncertainty, cutting through the SEC’s usual ’regulation by enforcement’ playbook. Take that, Gary Gensler.

Market reaction? Predictably euphoric—ETH staking yields spiked 18% within hours as institutional players scrambled to reposition. Because nothing gets Wall Street’s attention like regulatory arbitrage dressed up as innovation.

SEC Exempts Key Staking Functions from Securities Designation

The new statement confirms that individuals who self-stake eligible crypto assets and companies offering non-custodial or custodial staking-as-a-service are not engaging in securities transactions, as long as the activity centers around network consensus.

According to the SEC staff, bundling additional features, such as slashing protection, early withdrawal options, alternative reward structures or asset aggregation — also does not convert the activity into a regulated securities offering.

2/ As Comm’r @HesterPeirce said, "providing security is not a security." Base LAYER activities are technological & neutral, not financial/regulated. The guidance discusses how staking actually works — for solo, delegated, & staking a a service.https://t.co/0HHAtMbvAo

Over 30 Crypto Firms Urged SEC To Provide Clarity

The clarification comes as pressure from the crypto industry continues to build. In April, the Crypto Council for Innovation, a public policy group, sent a letter to the SEC urging it to deregulate staking.

The letter, signed by more than 30 crypto organizations, asked the agency to recognize staking as a “technical process” rather than an “investment activity.” It also called for clear guidelines, warning that overly strict rules could freeze market structures and stifle innovation in the staking space.

Commissioner Hester Peirce, a long-standing advocate for clearer crypto regulation, welcomed the update. She said the lack of clarity had “artificially constrained participation” in proof-of-stake networks. As a result, it had weakened decentralization and reduced the broader utility of blockchain systems in the US.

The SEC’s stance follows its earlier position on proof-of-work mining. In that case, the agency also found the activity did not amount to a securities transaction.

Although the statement is not legally binding, it offers valuable insight into the SEC’s evolving view on crypto activities. It may also set the stage for more formal guidance in the future.

For now, the clarification is expected to boost confidence among staking participants and service providers seeking to operate within the US legally.