Breaking Down the SEC's Landmark Staking Guidance

The U.S. Securities and Exchange Commission made waves in June 2025 by clarifying its stance on cryptocurrency staking. The new guidelines distinguish between legitimate protocol participation and activities that might constitute securities offerings——a move expected to reshape the proof-of-stake ecosystem.

Three Approved Staking Methods

According to the SEC's May 29 announcement, these staking approaches won't face securities law scrutiny:

1. Solo validation where users maintain full asset control while running nodes【Requires significant technical knowledge】

2. Non-custodial delegation to third-party validators without transferring ownership

3. Transparent custodial arrangements where exchanges clearly disclose staking terms

The Regulatory Bright Line

——Rewards earned through direct network validation now qualify as service compensation rather than investment returns—— This interpretation removes them from Howey Test consideration when:

- Participants contribute to consensus mechanisms

- No profit guarantees exist beyond protocol parameters

- Assets aren't pooled for speculative purposes

What Still Raises Red Flags

The guidance excludes several common practices from its safe harbor:

• Yield farming pools with artificial returns【Often show 300%+ APY claims】

• Opaque DeFi bundles promising fixed ROI

• Lending products marketed as "staking" services

Industry Impact and Next Steps

Major PoS networks like Ethereum and Cosmos stand to benefit most from these clarifications. For validators and stakers, the rules provide much-needed compliance clarity——though experts recommend:

- Maintaining detailed participation records

- Avoiding promotional language about returns

- Consulting legal counsel for complex staking-as-a-service models

As blockchain architect Wei Chen notes: "This isn't blanket approval, but rather careful demarcation of acceptable network participation." The guidelines leave room for future interpretation of emerging concepts like liquid staking derivatives.