US blockchain firms urge SEC to clarify crypto staking rules

A coalition of US blockchain firms has urged the Securities and Exchange Commission (SEC) to provide clear regulatory guidance on crypto staking.

The coalition, led by the Crypto Council for Innovation, requested in an April 30 open letter that the agency treat staking with the same clarity it recently applied to proof-of-work mining.

Staked tokens are not a security

The Council argued that staking is a core technical process for maintaining blockchain networks, not an investment contract.

It stated:

“The benefits of staking to a PoS network and its participants are clear: base layer actors are incentivized to contribute to the security of the network, minimize the risk of manipulative activity, ensure data integrity, and bolster community trust in the network.”

It stressed that staking allows users to validate transactions, secure the network, and help produce new blocks. In return, participants receive token-based rewards. These rewards are determined by each network’s protocol, not by a centralized authority or profit-sharing agreement.

The Council also pointed to the SEC Division of Corporation Finance’s March 2025 statement on PoW mining. In that statement, the SEC clarified that mining on decentralized networks is not a securities transaction.

The Council asserted that this reasoning should also apply to staking, as miners and stakers engage in administrative functions to support blockchain infrastructure and receive protocol-defined rewards.

Meanwhile, the letter acknowledged that some risks exist, such as the possibility of slashing, where stakers lose tokens for violating protocol rules.

However, it noted that slashing is uncommon and not a defining feature of staking’s economic model. Therefore, the Council maintains that staking should not be classified under securities laws.

Why is clarity needed?

The Crypto Council believes that formal guidance from the SEC would benefit many stakeholders, including developers, service providers, and end-users.

They argued that such clarity would remove uncertainties for platforms that offer staking, especially those connected to crypto exchange-traded funds (ETFs).

The Council further stressed that regulatory clarity would help the US stay competitive with other global jurisdictions, which are moving faster to support innovation in the digital asset space.

However, they cautioned against overly rigid rules that could limit innovation or reinforce outdated market practices.

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