SEC Declares Self-Staking on PoS Networks Not a Securities Offer

The SEC confirms that self-staking on PoS networks does not qualify as a securities transaction under federal securities laws.

Staking-as-a-service providers are excluded from securities status, even when offering features like slashing coverage or altered rewards.

PoW mining activities also remain outside the SEC's securities scope, requiring no registration for miners or mining pools.

The U.S. Securities and Exchange Commission’s Division of Corporation Finance has confirmed that individuals who self-stake digital assets on proof-of-stake (PoS) networks are not participating in securities transactions. The agency’s statement applies to specific covered crypto assets staked directly by users on PoS or delegated PoS protocols.

According to the SEC, both non-custodial and custodial staking-as-a-service providers fall outside securities laws when facilitating staking for others. The announcement includes those offering staking support features such as slashing coverage, which enables early return of assets and distribution of rewards through alternative payment arrangements.

Uncertainty hindered PoS adoption

The Division reported that because U.S. guidelines were lacking, many participants were discouraged from joining PoS consensus work and this reduced the decentralization of the network. By clearing up any uncertainty over staking, the SEC hopes that more people and businesses will join blockchain consensus processes and worry less about compliance issues.

The SEC reiterated that proof-of-work (PoW) mining activities remain outside the scope of securities law. It referenced a March update that said self-mining and participation in mining pools do not require registration. The reasoning centers on the absence of profit expectations from the efforts of others, which is a key factor in the Howey Test used to classify securities.

Ancillary services do not alter classification

The agency said combining staking services with extras such as slashing protection or altered reward programs does not affect their security status. It made clear that these services do not alter the basic character of staking to a selling of securities.

Since the SEC changed its leadership and rules, the agency has reduced enforcement efforts within the crypto space. Commissioner Hester Peirce’s Crypto Task Force is still considering how to classify crypto activities. The agency’s new guidance gives industry participants clarity on rules and regulations.

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