Crypto Heavyweights Turn Up Heat on SEC: ’Define Staking Rules or Get Out of the Way’

Over 30 blockchain titans—from Coinbase to Kraken—just fired a warning shot at U.S. regulators. Their demand? Clarity on staking regulations... or risk choking the next wave of financial innovation.

Wall Street’s revolving-door bureaucrats can’t seem to decide if staking is a security, a savings account, or something entirely new. Meanwhile, billions in digital assets hang in limbo.

The irony? Traditional finance lets banks gamble with customer deposits daily—but when crypto firms offer transparent yield? Cue the regulatory panic.

• Over 30 crypto entities, including a16z and Kraken, have urged the SEC to exempt staking from securities classification.
• The letter stresses that staking is a technical operation essential to blockchain security.
• It calls for tailored, principles-based rules to prevent regulatory overreach and preserve U.S. crypto competitiveness.

The Crypto Council for Innovation (CCI), supported by major players like a16z, Paradigm, and Kraken, has formally petitioned the Securities and Exchange Commission (SEC) for staking-specific regulatory guidance.

The CCI’s Proof of Stake Alliance (POSA), a 30-member association, sent a thorough letter to the SEC’s Crypto Task Force stating clearly that crypto staking is not a security activity but a technological process essential to blockchain network functioning.

1/ Today, CCI is proud to stand alongside nearly 30 key players in the industry to secure US leadership in staking. This kind of alignment matters. Here’s why: pic.twitter.com/1JZRtstpWD

The letter, written to Commissioner Hester Peirce, was in response to her recent request for stakeholder feedback about how staking and liquid staking are to be regulated.

At the CORE of the message is a clear demand: for staking to be recognized by the commission as a non-investment process and to refrain from loading the ecosystem with unsuitable legacy regulations.

POSA contends that the existing regime of securities disclosure is not compatible with staking and might unintentionally reduce U.S. competitiveness in this respect.

Crypto Groups Argue Staking Is Permissionless, Not Profit-Driven

Crypto staking is a process of locking tokens to assist with operations on proof-of-stake blockchains. The reward is derived not through centralized profits but through automated network protocol.

For staking to be convenient, numerous utilize third-party platforms that vary from custodial exchanges to decentralized liquid staking protocols.

As Marc Boiron, CEO of Polygon Labs and POSA contributor, puts it, staking security would be classifying an automated, permissionless process as a managed financial asset when it isn’t.

In the letter, POSA demonstrates how staking doesn’t meet the Howey test employed to define what a security is. There is no centralized issuer providing profits through their effort.

Stakers have full ownership of their assets and are able to withdraw them at their will. The staking reward is determined through a deterministic process and distributed through protocol-defined rules rather than on the managerial discretion of service operators.

SEC Urged to Follow International Lead

The group calls on the commission to take a principles-based approach in line with its past guidance regarding proof-of-work mining. Such an approach would stress clear fee transparency, audit of smart contracts, and user consent in place of strict financial filings.

The letter also advocates against promotional language and guaranteeing users full liquidity and control over their assets. Global regulators in Canada, the U.K., and Hong Kong are already breaking ground on crypto staking clarity. The U.S. is in danger of falling behind.

11/ Who signed on?@a16zcrypto @alluvialfinance @AvaLabs @babylonlabs_io @BlockchainAssn@BlockdaemonHQ @Consensys @crypto_council @TheDRC_ @fund_defi

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