Breaking Down the SEC's New Staking Framework

The U.S. Securities and Exchange Commission's 2025 guidance has finally clarified the regulatory landscape for cryptocurrency staking. This landmark decision distinguishes between legitimate network participation and investment contracts, creating clear boundaries for blockchain validators and investors alike.

Three Approved Staking Methods

The SEC now explicitly permits:

1. Direct validation - Individuals running their own nodes with minimum token requirements (e.g., 32 ETH for Ethereum)

2. Non-custodial delegation - Users maintaining private keys while assigning validation rights

3. Transparent custodial services - Exchanges staking assets with full disclosure and segregated accounts

The Howey Test Exception

——Rewards from genuine protocol participation no longer qualify as securities—— The SEC reclassified staking income as service compensation rather than investment returns, fundamentally changing the regulatory treatment of Proof-of-Stake networks.

Ancillary Services Get Green Light

The guidelines approve several supporting functions:

• Slashing protection for validator mistakes

• Flexible reward distribution schedules

• Asset pooling to meet minimum staking thresholds

【Notably】early unbonding options now allow faster access to staked assets without triggering securities laws.

What Remains Prohibited

While protocol staking gains approval, the SEC maintains restrictions on:

- Yield farming programs detached from consensus

- Opaque DeFi products guaranteeing returns

- Lending schemes marketed as staking

These activities still fall under securities regulations due to their reliance on third-party managerial efforts.

Industry Impact and Future Outlook

The clarification benefits multiple stakeholders:

• Node operators gain legal certainty for validation services

• Developers can build PoS networks without restructuring tokenomics

• Institutions receive clearer compliance pathways

Market analysts observe this could increase staking participation by 【42%】 within twelve months, significantly boosting network security across major blockchains.

Compliance Best Practices

To remain within legal boundaries, participants should:

1. Verify direct consensus participation

2. Maintain transparent custodial arrangements

3. Avoid fixed return promises

4. Provide clear service disclosures

——This regulatory clarity marks a turning point for mainstream staking adoption—— while maintaining necessary investor protections in the evolving crypto landscape.