A coalition of nearly 30 cryptocurrency advocacy groups, led by the Crypto Council for Innovation (CCI), has formally requested the U.S. Securities and Exchange Commission (SEC) to provide definitive regulatory guidance on crypto staking services. In a letter dated April 30 addressed to SEC Commissioner Hester Peirce, the CCI’s Proof of Stake Alliance (POSA) emphasized that staking is fundamentally a technical process rather than an investment activity.
The letter argues that staking does not meet the criteria of an “investment contract” under the Howey Test, as stakers maintain ownership of their assets and rewards are determined by blockchain protocols, not by the managerial efforts of staking providers. The coalition cautioned against overly prescriptive regulations that could hinder innovation and market development in the staking sector.
The advocacy groups urged the SEC to adopt principles-based guidance akin to recent statements on proof-of-work mining, facilitating responsible inclusion of staking features in exchange-traded products (ETPs). They highlighted the inadequacy of existing securities disclosure regimes for staking services, which are inherently technical in nature.
Prominent organizations supporting this initiative include venture capital firm Andreessen Horowitz (a16z), blockchain software company Consensys, and cryptocurrency exchange Kraken, which reinstated its staking services in the U.S. earlier this year. The SEC has yet to approve any crypto staking ETFs and recently postponed its decision on allowing staking for Grayscale’s spot Ether ETF.
The coalition noted a recent shift towards more constructive dialogue with the SEC, expressing hope that this collaborative approach will lead to regulatory clarity that supports innovation while ensuring consumer protection
