SEC Confirms Crypto Staking on PoS Blockchains Is Not a Security

Highlights:

• The SEC clarified that staking crypto on proof-of-stake networks is not considered a security.
• Staking rewards are payments for the work of node operators, not profits earned from others.
• Guidance excludes liquid staking and restaking, which may face securities law scrutiny.

US Securities and Exchange Commission’s Division of Corporation Finance said in a May 29 staff statement that crypto staking on proof-of-stake blockchain “don’t need to register with the Commission transactions under the Securities Act.” These staking activities are not considered securities and do not require special exemptions.

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2/ As Comm'r @HesterPeirce said, "providing security is not a security." Base layer activities are technological & neutral, not financial/regulated. The guidance discusses how staking actually works — for solo, delegated, & staking a a service.https://t.co/0HHAtMbvAo

— Rebecca Rettig (@RebeccaRettig1) May 29, 2025

Key Legal Insights on Crypto Staking and Securities Classification

Under federal law, a security is a type of financial product such as stocks, bonds, contracts, or derivatives. It involves people investing money with the expectation of earning a profit from the efforts of others.

The SEC noted that staking rewards are payments for the work done by node operators. These rewards are not profits from someone else’s business efforts, so they are not treated as securities. The agency also said custodians don’t control staking amounts, so custodial staking is not a securities offering. They only help with the staking process as agents, the agency added.

The division’s staff explained that they do not see extra staking services—like slashing protection, early withdrawals, or different reward payment schedules—as securities. They described these features as simple administrative tasks.

The guidance highlights three staking methods:self-staking, where users directly stake their own assets; self-custodial staking, where owners retain control but assign staking to node operators; and custodial staking, where custodians handle staking on behalf of clients. However, it excludes liquid staking and restaking because providers control staking and may face securities rules.

Clear SEC Rules on Staking Spark Support and Criticism

Hester Peirce, Republican SEC Commissioner and head of the agency’s Crypto Task Force described the guidance as a positive step, providing much-needed clarity for stakers and staking-as-a-service providers in the U.S.

She said:

“Uncertainty about regulatory views on staking discouraged Americans from doing so for fear of violating the securities laws. This artificially constrained participation in network consensus and undermined the decentralization, censorship resistance, and credible neutrality of proof-of-stake blockchains.”

Rebecca Rettig, chief legal officer at Jito Labs, shared on X that the SEC’s decision opens the door for crypto ETFs to incorporate staking in their offerings.

Yep

— Rebecca Rettig (@RebeccaRettig1) May 29, 2025

Meanwhile, Democrat SEC Commissioner Caroline Crenshaw criticized the recent statement from the Division of Corporate Finance. She said it gives an incomplete view of crypto laws and downplays the serious risks these products pose to investors.

The clarification comes as the crypto industry increases its calls for regulatory relief. In April, the Crypto Council for Innovation, a policy advocacy group, officially requested that the SEC reduce restrictions on staking. More than 30 crypto firms signed the letter, urging the SEC to classify staking as a technical function rather than an investment activity. They also asked for clear rules and warned that strict laws could stop market growth and block new ideas in staking.

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