SEC’s Delightful Revelation: Crypto Staking is Just Fine, Thank You! 🎉

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What to know:

  • The SEC, in a most agreeable manner, has declared that staking activities do not contravene the securities law.
  • This proclamation permits companies to engage in delightful services such as staking, pooled staking, and custody, as per the experts at CoinDesk.
  • It is but the latest in a series of official, albeit non-binding, musings from the esteemed regulator.

In a most curious turn of events, it appears that crypto staking, under certain agreeable circumstances, does not infringe upon the U.S. securities law, as stated by a branch of the U.S. Securities and Exchange Commission late on a Thursday, which one might say is rather fortuitous.

The SEC’s Division of Corporation Finance has published a staff statement — the latest in a series of such delightful communications — elucidating how the regulator may assess proof-of-stake networks. Notably, it was mentioned that the activities in question do not “involve the offer and sale of securities,” thus sparing any person or company from the clutches of litigation.

Node operators, validators, custodians, delegates, nominators, and those staking assets, whether independently or on behalf of others, find themselves in this rather cozy category, as the staff statement suggests that staking shall be regarded in the same light as mining — a consensus mechanism that secures networks like Bitcoin, which, as the SEC clarified last month, also does not engage the securities laws.

“The SEC’s staff statement was remarkably clear for a subject that can be rather convoluted,” remarked Lorien Gabel, the CEO of a staking-focused crypto firm, Figment. The primary advantage seems to be that various activities which U.S. companies might have previously approached with trepidation are now deemed acceptable. How splendid! 🎩

“They included some ancillary staking activities. For instance, we provide insurance against slashing and also offer modified unbonding periods,” he continued. “And they have assured us that this does not imply one is a manager of assets as a staking provider.” How reassuring!

The SEC’s statement indicates that companies wishing to offer such services, or even pooled staking, may proceed with their endeavors, which is indeed a cause for celebration.

Thursday’s announcement is an incremental yet significant update from the regulator, as noted by Alison Mangiero, the head of staking policy at the Crypto Council for Innovation. “This reaffirms that stakers shall be treated similarly to miners, which is particularly noteworthy given the previous administration’s penchant for enforcement actions against staking as a service. Many of those cases were dismissed, including the Coinbase case, which was dismissed with prejudice,” she stated. “We had anticipated this stance, but the existence of a staff statement asserting it is of paramount importance.”

It is rather telling that this statement arrived just days before the SEC faces a deadline regarding numerous applications to incorporate staking into spot ether exchange-traded funds (ETFs). One might speculate that ETF providers would have received approvals regardless, yet the SEC’s statement is likely to expedite the process of securing such approvals, as Gabel noted.

As with the SEC’s previous staff statements, Thursday’s missive included a footnote clarifying that it is narrowly tailored and certain restrictions shall apply. It is not a substitute for rulemaking conducted by the actual commissioners and “has no legal force or effect,” the footnote wisely cautioned.

“This statement only addresses certain activities involving Covered Crypto Assets that do not possess intrinsic economic properties or rights, such as generating a passive yield or conferring rights to future income, profits, or assets of a business enterprise,” another footnote elaborated. How delightfully intricate!

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2025-05-30 07:09