On May 29, 2025, the SEC (United States Securities and Exchange Commission) issued a regulatory position statement regarding staking activities on specific PoS networks, which has attracted widespread attention from the encryption industry. Although this statement is not final law or a formal system, it clearly expresses the SEC’s regulatory stance on staking activities, holding significant guidance and reference value, and may influence the formulation and implementation of relevant policies in the future.
1. Stake Related Definitions
In this statement, the SEC defines Protocol Staking as: the act of users staking encryption assets that are closely related to the operation of the network in a public, permissionless blockchain network using the Proof-of-Stake (PoS) mechanism, in order to gain the rights to participate in network consensus, maintain network security and technical operations, and thus earn rewards.
At the same time, the assets involved in the staking process are referred to as “Covered Crypto Assets”. These assets are usually directly related to the operation mechanism of the network, primarily used to participate in network consensus (such as validating new blocks) and ensuring technical stability and security. Users participate in network operations by staking these assets and receive corresponding rewards. Typical examples include ETH from the Ethereum network, DOT from the Polkadot network, and ATOM from the Cosmos network.
In this process, validators gain the permission to verify new blocks through stake. Their rewards may come from newly minted encryption assets, network transaction fees, and other incentive mechanisms. This design aims to encourage users to actively stake assets to enhance the decentralization and security of the network, as the more stake there is, the stronger the network’s ability to resist “malicious majority control” attacks.
According to the different staking methods, the SEC categorizes them into three types:
• The first type is users running their own nodes, fully controlling their assets through “Self or Solo Staking,” where users can receive full rewards.
• The second type is where users delegate verification rights to third-party nodes while still managing their own assets and private keys, known as “Self-Custodial Staking with Third Party.” The third-party node operators assist in participating in verification and share some rewards, allowing users and verifiers to jointly earn staking rewards.
• The third type is where users entrust their assets to a third-party custodian, who stakes on their behalf, known as “Custodial Staking”; rewards are distributed according to the agreed ratio.
The SEC emphasizes that custodians must not use users’ staked assets for lending, trading, or other non-staking purposes. At the same time, the SEC will focus on whether the ownership and control of assets change during the staking process, whether third parties use the assets for other purposes (such as lending or trading), whether the method of participation constitutes a securities issuance or investment contract, and whether these mechanisms may increase the risk to users’ assets or pose risks to network governance.
2. The Non-Security Nature of Protocol Staking
The main discussion of this statement is whether protocol stake falls under the category of securities regulation. In this regard, the SEC stated that the determination of whether staking is a “security” mainly depends on whether users are putting their money in, giving it to others to operate, and expecting to make money from the efforts of others. They use a standard called the Howey test.
To put it simply, if the staker runs the node and pledges the assets by himself, this does not meet the conditions of relying on others to make money in the security, and it is not considered a security. Even if the verification right is authorized to a third-party node, as long as the control of the asset is not transferred, the node party is only operating on behalf of the node, and it is not considered to rely on others to make a profit. At the same time, in the custody pledge, even if the user hands over the assets to a third party, the custodian only operates on behalf of the user and does not carry out decisive management, such as whether to pledge, how much to pledge, when to pledge, etc., which does not constitute the “substantial efforts of others” clause in the securities. In other words, as long as it’s not a “you pay, someone else does the work, you wait to make money” model, the SEC doesn’t usually recognize it as a security.
Therefore, the SEC believes that user participation in “protocol stake” in blockchain networks that adopt the Proof of Stake (PoS) mechanism does not essentially fall within the definition of “securities” under the U.S. Securities Act or the Exchange Act, and does not need to be registered or exempted from registration under securities-related regulations.
In addition, regarding the “Ancillary Services” provided during the staking process, the SEC believes that they are essentially auxiliary administrative or transactional operations and do not constitute securities activities. For example: helping users bear the losses caused by node slashing, providing early redemption services, adjusting the timing or frequency of reward distribution, or aggregating the assets of multiple users to meet the staking threshold, etc. These services are solely to make it easier for users to stake and do not involve profit guarantees or active management, and therefore do not fall under the scope of securities regulation.
3. Market Impact
Although the SEC stated in this announcement that some PoS protocol staking activities do not in themselves constitute securities issuance, it also clearly emphasized a premise: that only when the staking activities are completely “self-managed” by the users, such as running nodes independently, controlling private keys, participating in staking with their own assets, and not relying on third parties for returns, do they not fall under the category of securities.
On the contrary, those staking activities that rely on third parties may soon be defined as securities. This is especially true when users entrust their encryption assets to centralized platforms or custodians for safekeeping, where users do not directly participate in node operations but instead rely on these third parties to complete staking and receive returns. Such a model may trigger the Howey Test standard for determining securities under U.S. law, which states that users obtain expected returns based on “the efforts of others.”
According to this policy statement, some current encryption sectors may be affected to varying degrees:
For PoS public chain projects (such as Ethereum, Cosmos, etc.), although current protocol staking is considered not to fall under the category of securities, if the staking behavior within its ecosystem is commercialized and centralized by third parties, it may be regulated by regulatory agencies as securities trading.
For centralized staking platforms, such as Coinbase, Binance, and other centralized exchanges, the staking products offered by CEX typically involve the custody of user assets and helping users earn returns, which align with the typical characteristics of the Howey Test. The SEC may require these types of services to complete securities registration or to adopt stricter disclosure obligations and compliance reviews in the future, thereby increasing the compliance costs and legal risks for the platforms.
For DeFi staking protocols such as Lido and Lombard, although these protocols emphasize “decentralization,” whether their governance and node operations are truly decentralized, and whether users clearly understand the yield logic, may still lead to regulatory discussions. In particular, liquid staking derivatives (such as stETH and LBTC) are tokens obtained by users after staking, representing their staking rights. These tokens can be traded in the market and possess attributes of financial assets. Due to their tradable and security-like characteristics, they may attract indirect regulatory attention and could even be classified as assets that need to comply with financial regulatory requirements, thus subjecting such projects to a stricter regulatory environment.
For ordinary users, a more compliant and prudent approach is to prioritize “self-staking” or “non-custodial” methods, such as using hardware wallets, running validation nodes independently, or choosing staking services with decentralized characteristics; it is advisable to avoid completely relying on third-party platforms for staking, especially those that promise bundled returns, as the risks come not only from the platforms themselves but may also be affected by changes in regulatory policies; in addition, users should also follow whether the platform provides transparent staking processes and risk warnings, including node selection methods, sources of returns, and fee deduction mechanisms, to assess whether it has the characteristics of neutral and non-manipulative services.
4. Summary
In summary, the SEC is paving the way for “whether staking constitutes a securities activity” through clearer classifications and regulations. Whether it is a centralized platform or a DeFi protocol, as long as it involves user asset custody, yield promises, or third-party operations, it may fall under regulatory scrutiny. In the future, the distinction between “neutral tools” and “financial services” will become clearer. Project parties and platforms need to pay more attention to compliance design, and users should prioritize staking methods that allow for self-controlled assets and transparent information.
Reference
- Statement on Certain Protocol Stake Activities. Link:
2.Re: Law and Policy Considerations Relevant to Staking Services. Link:
