The post SEC Clears the Air on Crypto Staking and Securities Laws appeared on BitcoinEthereumNews.com.

The US Securities and Exchange Commission’s (SEC) Finance division has clarified that certain proof-of-stake (PoS) blockchain staking activities fall outside the definition of securities transactions under federal regulations. Industry experts suggest this development could open the door for crypto exchange-traded funds (ETFs) to integrate staking features into their products. SEC Provides Regulatory Clarity on Staking  The Division of Corporation Finance released the statement on May 29, 2025. It specifies that Protocol Staking Activities, which include solo staking, self-custodial staking through third-party validators, and custodial arrangements where platforms stake assets on behalf of customers, do not involve the offer or sale of securities.  “It is the Division’s view that “Protocol Staking Activities” in connection with Protocol Staking do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the “Securities Act”) or Section 3(a)(10) of the Securities Exchange Act of 1934 (the “Exchange Act”),” the statement read. The division also clarified that ancillary services associated with staking, such as slashing insurance or early withdrawal options, are not considered securities activities. A crucial factor in this reasoning is that the rewards earned from staking are generated by the network’s underlying protocol, not through the efforts of third parties. According to the SEC branch, staking does not meet the criteria for an investment contract under the Howey test. As a result, participants in these staking activities are not required to register their transactions as securities with the SEC. This provides greater regulatory clarity and reduces legal uncertainty for PoS network participants and service providers. Commissioner Hester Peirce, speaking at The Bitcoin Conference, reinforced this view, stating,  “Providing security is not a security.” This guidance marks a significant step in the SEC’s ongoing efforts to define the regulatory framework for cryptocurrency activities. It follows…

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Filed under: News - @ May 30, 2025 7:29 am