Major crypto organizations and industry experts are calling the Securities and Exchange Commission’s recent cryptocurrency staking rules a game-changing development for digital asset oversight.
On May 29th, the SEC’s Corporation Finance Division released new guidelines stating that “Protocol Staking Activities” like tokens staked directly on proof-of-stake networks don’t require registration as securities under federal law. The commission also stated that staking rewards represent payment for validator services, not returns from third-party efforts - an important distinction under the Howey Test for securities classification.
Industry Response and Implications
Sarah Mitchell from the Digital Asset Policy Council called it “a breakthrough moment” and noted that “the SEC finally acknowledges what we’ve been saying - staking is fundamental blockchain infrastructure, not investment schemes.”
The Policy Council’s Blockchain Validation Group has been pushing for this recognition through education campaigns and regulatory submissions explaining why both self-custody and third-party staking shouldn’t be treated as investment products.
Impact on Staking ETF Applications
This guidance has increased hopes for Ethereum staking ETF approvals. Although the SEC recently postponed decisions on staking features for VanEck’s ETH fund and Franklin’s SOL ETF, these new rules could enable ETF growth by mid-2025.
Regulatory Philosophy Change
This development reflects broader changes in SEC crypto policy, highlighted by their new Digital Assets Working Group under Commissioner Caroline Wilson. Their initial findings should be published soon and may influence future crypto regulations.
While uncertainties about liquid staking and derivative protocols remain, industry leaders view this guidance as progress toward balanced crypto regulation that supports innovation while maintaining proper safeguards.