SEC Endorses Crypto Staking as Non-Security Activity in Landmark Guidance

On May 29, the SEC’s Division of Corporation Finance provided its views on staking on networks that use proof-of-stake as a consensus mechanism.

The Division concluded that protocol staking activities do not constitute securities offerings under federal securities laws and no registration is required.

“Accordingly, it is the Division’s view that participants in Protocol Staking Activities do not need to register with the Commission transactions under the Securities Act, or fall within one of the Securities Act’s exemptions from registration in connection with these Protocol Staking Activities.”

CRYPTO IS WINNING.

The SEC just said that crypto staking on PoS networks does not involve securities.

This is huge! pic.twitter.com/bfaNc7hQ0w

— Kyle Chassé / DD (@kyle_chasse) May 30, 2025

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