The U.S. Securities and Exchange Commission’s Division of Corporation Finance issued a staff statement setting out its view that specified “protocol staking” activities involving certain proof-of-stake networks do not constitute the offer and sale of securities under the Securities Act of 1933 or the Securities Exchange Act of 1934, and therefore do not require Securities Act registration or an exemption. The statement is limited to “Covered Crypto Assets” that are intrinsically linked to the programmatic functioning of a public, permissionless network and are used to participate in, or earned for participating in, the network’s consensus mechanism or maintaining its operation and security. The staff view covers staking of Covered Crypto Assets on a proof-of-stake network, the activities of involved service providers (including node operators, validators and custodians) in earning and distributing rewards, and certain “ancillary services” such as slashing coverage, early unbonding, non-guaranteed alternate reward payment timing, and aggregation to meet protocol minimums. Applying the Howey “investment contract” analysis, the statement characterises protocol staking as administrative or ministerial validation activity where rewards are paid by the protocol in exchange for services to the network, rather than profits derived from the entrepreneurial or managerial efforts of others, including in self-staking, self-custodial delegation to a third-party node operator, and limited custodial arrangements where the custodian acts as an agent and does not decide whether, when, or how much to stake. The statement also emphasises that it is a staff view with no legal force or effect, that outcomes can differ on different facts, and that it does not address other forms of staking such as liquid staking, restaking or liquid restaking.
U.S. Securities & Exchange Commission 2025-05-29
U.S. Securities and Exchange Commission staff states certain proof-of-stake protocol staking activities are not securities offerings
The U.S. SEC’s Division of Corporation Finance clarified that certain "protocol staking" activities on proof-of-stake networks are not securities offerings under the Securities Act of 1933 or the Securities Exchange Act of 1934. The statement applies to "Covered Crypto Assets" on public, permissionless networks, noting that staking rewards are administrative, not profit-driven. It is a staff view without legal force and does not cover other staking forms like liquid staking.