SEC Brings Long-Awaited Clarity to Crypto Staking
On May 29, 2025, the U.S. Securities and Exchange Commission (SEC) issued long-awaited guidance clarifying how staking on proof-of-stake (PoS) networks will be treated under securities law. Before this update, many crypto investors and service providers were unsure whether staking rewards could be classified as securities offerings — a gray area that limited participation in staking services.
Under the new guidelines, protocol staking activities directly tied to a blockchain’s consensus mechanism — such as solo staking, delegated staking, and certain forms of custodial staking — are not considered investment contracts and fall outside of SEC enforcement under the Howey test.
What Types of Staking Are Now Allowed?
According to the SEC, the following staking practices are now permitted in the U.S.:
- Solo staking: Individuals staking their own tokens through personal infrastructure, retaining control of their assets while validating transactions, are fully compliant.
- Delegated staking: Token holders can delegate staking rights to third-party validators without transferring ownership, as long as control remains with the token owner.
- Custodial staking: Exchanges and custodians may stake tokens on behalf of clients if assets are clearly segregated, disclosures are transparent, and users retain full ownership rights.
However, the SEC drew a sharp line between legal staking and prohibited activities. Yield farming, staking products with guaranteed returns, and lending programs disguised as staking will still be treated as unregistered securities offerings.
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How Will This Benefit the PoS Ecosystem?
The new clarity is a major win for individual stakers, validator operators, and crypto exchanges alike. It removes regulatory uncertainty that has limited U.S.-based staking and opens the door for greater institutional participation. With a clear legal path, more validators can operate nodes, and more users can stake assets on networks like Ethereum, Cosmos, and Cardano, improving decentralization and security across PoS blockchains.
Best Practices for Compliant Staking in 2025
To stay compliant under the new guidelines, participants should:
- Ensure staking directly supports network consensus
- Maintain transparent custodial arrangements
- Avoid offering fixed or guaranteed staking returns
- Seek legal review when launching staking services
By adhering to these practices, stakers and service providers can confidently operate in the U.S. under the SEC’s new framework — marking a major step forward for legal crypto staking in 2025.