- SEC clarifies that self and custodial crypto staking aren’t considered securities offerings.
- Staking rewards are viewed as compensation for services, not profits from others’ efforts.
- SEC guidance excludes liquid staking and restaking, leaving legal uncertainty in those areas.
The U.S. Securities and Exchange Commission (SEC) has issued new guidance on crypto staking activities in the United States. This comes after months of debate over whether staking violates federal securities laws. Crypto industry leaders had long called for regulatory clarity.
In a May 29 statement, the SEC’s Division of Corporation Finance clarified its position on “Protocol Staking Activities” involving proof-of-stake (PoS) networks. The agency said most staking activities do not require registration under the Securities Act. This includes self-staking and custodial staking.
According to the SEC, staking rewards are payments for services, not profits based on another party’s work. That distinction is important. Self-staking occurs when users run their own validator nodes and stake their own tokens. The SEC said this does not involve securities. In self-staking, the user maintains control of their tokens and directly earns rewards. No third-party management is involved. The Commission said these rewards come from “ministerial or administrative” actions, not managerial or entrepreneurial work by others.
The SEC also clarified that self-custodial staking, where users delegate validation rights to a third-party node operator without giving up token control, does not constitute a securities offering. Since users do not rely on others for profit, it falls outside the agency’s purview. The agency stated that for custodial staking, where a crypto platform stakes a customer’s assets, the platform acts only as an agent and doesn’t control the rewards. Simply selecting a validator or staking assets does not qualify as managing the staking process in a legal sense, the SEC added.
Related: Michael Saylor Rejects Proof-of-Reserves Over Security Risks
However, the SEC noted that liquid staking and restaking were not included in this guidance. Legal uncertainty remains for those areas. Commissioner Hester Peirce supported the new guidance. She said it helps U.S. users participate in crypto without fear of breaking laws. She added that past uncertainty discouraged staking and hurt decentralization. This guidance, she said, helps protect network integrity.
But Commissioner Caroline Crenshaw disagreed. She said the staff ignored legal precedents and gave users a false sense of compliance. Crenshaw said the approach reflects future hopes, not current law. She warned that it does not provide a dependable legal roadmap. The new guidance has no legal force but provides insight into how the SEC views staking under current laws.
