SEC Greenlights Crypto Staking—Says It’s Not a Security in Game-Changing Move
Wall Street’s watchdog just handed crypto a rare win. The SEC’s new guidance draws a line between staking and securities—effectively giving decentralized networks breathing room to operate without fear of regulatory hammer drops.
Why it matters: Staking—where users lock up tokens to validate transactions and earn yields—has been a gray area for years. Now? The agency’s stance could turbocharge adoption as institutional players finally get regulatory cover. (Cue the hedge funds ‘discovering’ staking yields at 3x Treasury bills.)
The fine print: This isn’t a free pass. Projects still need to prove they’re sufficiently decentralized to dodge security classification. But for protocols like Ethereum post-Merge? It’s the closest thing to a blessing they’ll get from Gary Gensler’s crew.
Bottom line: The crypto industry gets to pop champagne—for now. Because if there’s one thing finance loves more than innovation, it’s finding new ways to regulate it into oblivion later.
Staking is Not Securities Related
The statement addressed three main types of staking arrangements: self (solo) staking, where node operators stake their own crypto assets using their own resources, self-custodial staking with third parties where asset owners grant validation rights to third-party node operators while retaining ownership and control, and custodial arrangements where third-party custodians hold and stake crypto assets on behalf of owners.
The Division applied the Howey test and concluded that protocol staking fails to meet the “investment contract” criteria. This was due to there being no reliance on the entrepreneurial efforts of others since staking rewards come from administrative and ministerial activities, not managerial decisions.
Additionally, there is no common enterprise based on others’ efforts, as participants earn rewards through their own protocol compliance, not from third parties’ business success. Finally, it stated that staking activities are essentially service provision rather than investment in a profit-generating enterprise.
CoinFund President Christopher Perkins thanked the SEC for what the industry has asked for all along – clarity.
Thank you to the @SECGov and the Crypto Task Force for what should have been table stakes all along—a little thing called CLARITY. pic.twitter.com/1JVeejt37n
— Christopher Perkins
NYC (@perkinscr97) May 29, 2025
ETF Store President Nate Geraci also celebrated the good news, stating that it was “Another hurdle cleared for staking in spot Ether ETFs.”
CLARIY Bill Introduced
In related news, on May 29, US lawmakers introduced a bipartisan regulatory framework for crypto assets called the “Digital Asset Market Clarity Act of 2025” or “CLARITY Act of 2025.”
The Clarity Act addresses the roles of the SEC and the Commodity Futures Trading Commission (CFTC) on crypto regulations in an effort to determine which agency will have oversight.
House Committee on Financial Services Chairman French Hill, who introduced the bill, said, “Our bill brings long-overdue clarity to the digital asset ecosystem, prioritizes consumer protection and American innovation.”
“America should be the global leader in the digital assets marketplace – but we can’t do that without establishing a clear regulatory framework,” added bill sponsor Dusty Johnson.
NEW: Chairman @RepFrenchHill today introduced the CLARITY Act, a bipartisan bill which WOULD establish a regulatory framework for digital assets in the US.
Read more
https://t.co/fV7N7aXAdb pic.twitter.com/5ZIpFTcDDD
— Financial Services GOP (@FinancialCmte) May 29, 2025
