Wall Street's Collateral Craze: Five Key Trends to Watch Under the SEC's New Rule

Original Title: Wall Street's Staking Rush

Original Author: Thejaswini M A

Original Translation: Block unicorn

Introduction

In 1688, ship captains would gather at Edward Lloyd's Coffee House in London, looking for individuals willing to provide insurance for their voyages. Wealthy merchants would sign under the ship's details, becoming "underwriters," using their personal wealth to guarantee these high-risk voyages. The better the underwriter's reputation, the safer it was for everyone. The system became more secure, attracting more business. It was simple: provide funding, reduce everyone's risk, and then take a share of the profits.

Reading the new guidance from the U.S. Securities and Exchange Commission (SEC), it is evident that cryptocurrency has merely digitized the mechanism invented by the coffeehouse underwriters—where people earn returns by putting their assets at risk to make the entire system more secure and trustworthy.

Staking. Yes, it's back on the agenda. Everything changed on May 29, 2025. On this day, the U.S. government explicitly stated that staking would not get you into legal trouble. Firstly, let's recap why this is so crucial now. In staking, you can lock up your tokens to help secure the network and receive stable rewards.

Validators use their staked tokens to validate transactions, propose new blocks, and keep the blockchain running smoothly. In return, the network rewards them with newly minted tokens and transaction fees. Without stakers, proof-of-stake networks like Ethereum would collapse.

Of course, you can stake your tokens, but no one knows if the U.S. Securities and Exchange Commission (SEC) will one day show up at your door, claiming you are conducting an unregistered securities offering. This regulatory uncertainty has left many institutions on the sidelines, enviously watching retail stakers earn 3-8% in annualized returns.

The Great Staking Rush

On July 3, the Rex-Osprey Solana + Staking ETF launched, becoming the first fund in the U.S. to offer direct cryptocurrency investment with staking rewards. It holds SOL through a Cayman Islands subsidiary and uses at least half of its holdings for staking. "The United States' first staking crypto ETF," Rex Shares announced. And they are not alone.

Robinhood has just introduced cryptocurrency staking services for U.S. customers, initially supporting Ethereum and Solana. Kraken added Bitcoin staking through the Babylon protocol, allowing users to earn BTC rewards while keeping their assets on the native chain. VeChain launched a $15 million StarGate staking program. Even Bit Digital has exited its entire Bitcoin mining business to focus on Ethereum staking.

What Just Changed?

Two Regulatory Dominoes

First, the U.S. Securities and Exchange Commission (SEC) issued Staking Guidance in May 2025. It states that it's perfectly fine if you stake your own cryptocurrency to help secure a blockchain network and it is not considered a high-risk investment or security. This covers solo staking, delegating your tokens to others, or staking through a trusted exchange, as long as your stake directly benefits the network. This will decouple most staking behaviors from the "investment contract" definition under the Howey Test. This means you no longer have to worry about inadvertently violating complex investment laws just by staking and earning rewards.

The only red flag here is when someone promises guaranteed returns, especially when mixing staking with lending, or introducing fancy terms such as DeFi yield farming, guaranteed returns, or yield optimization through products like DeFi yield farming, guaranteed returns, or yield optimization through products like DeFi bundled products.

Second is the "CLARITY Act." This is a bill proposed in Congress aimed at clarifying which government agency is responsible for different digital assets. It specifically aims to protect those who only run nodes, stake, or use self-custody wallets from being treated like Wall Street brokers.

It introduces the concept of an "Investment Contract Asset," a new category of digital assets, and establishes standards to determine when digital assets are regulated by the SEC as securities or by the CFTC as commodities. The bill sets up a process for when blockchain projects or tokens will "mature" and move from SEC to CFTC oversight and imposes deadlines on SEC reviews to prevent indefinite delays.

So, what does this mean for you?

With the SEC's guidance, you can now stake your cryptocurrency in the U.S. with more confidence. If the "CLARITY Act" passes, everyone looking to stake or engage with cryptocurrency will have a more convenient and secure experience. Staking rewards are still taxed as ordinary income when you receive "dominion and control," and if you later sell the rewards for profit, you'll be subject to capital gains tax. All staking income, regardless of amount, must be reported to the Internal Revenue Service (IRS).

Who's in Focus? Ethereum.

Not Ether, but around $2,500.

While the price has been flat, Ethereum's staking metrics have shown a different story. The amount of staked ETH has just hit an all-time high, surpassing 35 million ETH, nearly 30% of the total circulating supply. While this infrastructure build-out has been ongoing for months, it has suddenly become even more crucial.

What's Happening Inside the Boardroom?

BitMine Immersion Technologies has just raised $250 million to purchase and stake Ethereum (ETH), with the company chaired by Tom Lee of Fundstrat. Their strategy is to bet that staking rewards along with potential price appreciation will outperform traditional sovereign debt assets. SharpLink Gaming has further solidified this strategy by expanding their ETH reserves to 198,167 tokens and putting their entire holdings into staking. In just one week in June, they earned 102 ETH in staking rewards. All it takes is locking up the tokens to access "free money."

Meanwhile, Ethereum ETF issuers are in line waiting for staking approval. Bloomberg analysts predict a 95% chance of regulatory approval for staking ETFs in the coming months. BlackRock's head of digital assets called staking a "huge step forward" for Ethereum ETFs, and his view might be right.

If approved, these staking ETFs could potentially reverse the fund outflows that have plagued Ethereum funds since their inception. Why settle for just price exposure when you can get both price exposure and yield?

Cryptocurrency Speaks Wall Street's Language

For years, traditional finance has struggled to grasp the value proposition of cryptocurrency. Digital gold? Perhaps. Programmable money? Sounds complicated. Decentralized applications? What's wrong with centralized applications? But what about yield? Wall Street understands yield. Admittedly, bond yields have rebounded from near-zero lows in 2020, with one-year U.S. Treasury bond yields reaching around 4%. But a regulated cryptocurrency fund that can generate a 3-5% annual staking reward while also offering potential upside on the underlying asset is truly compelling.

Legitimacy is paramount. When pension funds can gain Ethereum exposure through a regulated ETF and earn returns by securing the network, it's a big deal. Network effects are starting to show. As more institutions participate in staking, the network becomes more secure. As the network becomes more secure, it attracts more users and developers. As adoption increases, transaction fees also rise, boosting staking rewards. It's a virtuous cycle that benefits all participants.

You don't need to understand blockchain technology or believe in decentralization to appreciate an asset that earns you returns for holding it. You don't need to subscribe to Austrian economics or distrust central banks to appreciate an asset serving as productive capital. All you need to understand is that the network needs security, and those providing security deserve to be rewarded.