Crypto Advocates Demand SEC Clarity on Staking Rules
30 Groups Say Staking Is Technical, Not Investment Activity
In a major push for regulatory clarity, nearly 30 U.S. crypto advocacy organizations have called on the Securities and Exchange Commission (SEC) to clearly define the legal standing of crypto staking, arguing that the process is a technical function, not an investment scheme.
The Crypto Council for Innovation (CCI), spearheading the initiative through its Proof of Stake Alliance (POSA), addressed an official letter on April 30 to SEC Commissioner Hester Peirce, who leads the agency’s Crypto Task Force. The group emphasized that staking is foundational to blockchain systems and does not resemble traditional investment behavior as outlined in the Howey Test, the decades-old legal framework used to determine what constitutes a security.
“Staking isn’t niche — it’s the backbone of the decentralized internet,” the letter stated.
Staking Does Not Fit the SEC’s Securities Framework, Say Advocates
The SEC had invited public feedback on whether staking and liquid staking — practices where users lock up their crypto tokens to earn rewards — should be regulated under federal securities laws. In response, POSA urged the SEC to avoid heavy-handed policies that could “freeze market structures and stifle innovation.”
The letter argues that staking lacks the central feature of an investment contract: the reliance on managerial efforts to generate profit. Instead, rewards come from protocol operations, and users retain ownership of their tokens at all times.
In contrast to investments in companies, where profits are derived from managerial decisions, the group maintained that blockchain protocols, not staking providers, generate staking yields. Therefore, applying traditional securities laws could lead to inappropriate regulatory outcomes.
Calls for Principles-Based Guidance
POSA requested the SEC issue principles-based guidance, akin to past statements made for proof-of-work mining, allowing innovation without the chilling effect of ambiguous regulation.
“In the past 4 months, we’ve seen more movement and constructive dialogue with the SEC than in the past 4 years,” the group wrote. “Now, the industry is stepping up with concrete principles to include in guidance.”
The crypto industry, still awaiting the approval of a staking-enabled exchange-traded fund (ETF), sees this moment as pivotal. The SEC has yet to greenlight such a product and recently postponed a decision on Grayscale’s Ether ETF, which includes staking functionality.
Prominent Names Back the Push
Backing the call for regulatory clarity are some of the biggest names in the blockchain space, including Andreessen Horowitz (a16z), Consensys, and Kraken, the latter having resumed staking services in the U.S. earlier this year.
While Bloomberg ETF analyst James Seyffart noted in April that an Ether ETF with staking could arrive as soon as May, the SEC’s hesitancy signals continued uncertainty.
As crypto adoption accelerates, industry voices are increasingly unified in demanding clear, actionable guidelines that distinguish between technical infrastructure and financial investment products.
Summary for Social Media
A coalition of 30 leading U.S. crypto advocacy groups, including a16z, Consensys, and Kraken, has urged the SEC to clarify its stance on staking, claiming it’s a technical process, not an investment. The Crypto Council for Innovation argued that staking does not meet the legal definition of a security under the Howey Test, and excessive regulation could hinder blockchain innovation. The call includes a request for principles-based guidance to support innovation without compromising compliance. The SEC has yet to approve any staking-enabled ETFs, though analysts expect movement soon.
The move comes as industry optimism grows following improved engagement with the SEC over the past few months. With the crypto ecosystem’s future partly hinging on this debate, the industry is presenting a unified front for fair regulatory treatment.
Major players are now waiting to see whether the SEC will issue new guidance or continue its cautious stance, especially as the decision on staking-linked ETFs — like Grayscale’s spot Ether ETF — remains pending.
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