- SEC approves specific PoS staking models for individuals and protocols.
- Non-custodial/self-custodial staking deemed non-securities transactions.
- Expected resurgence in U.S. institutional staking interest.
SEC clarifies Proof-of-Stake (PoS) staking, ruling it non-securities under Howey Test, outlining custodian requirements.
The decision impacts regulatory clarity, easing market concerns, and potentially boosting U.S-based staking activities.
The U.S. Securities and Exchange Commission (SEC) issued new guidelines clarifying that various Proof-of-Stake (PoS) staking models, including self-staking, third-party, and custodial arrangements, are legally allowed. The decision addresses longstanding regulatory uncertainties.
The ruling specifies that PoS staking activities by individuals or decentralized protocols do not constitute investment contracts under the Howey Test. This marks a significant change, particularly affecting major stakeholders like Ethereum.
“When an individual or decentralized protocol participates in Proof-of-Stake consensus and receives rewards, such activity does not, in itself, constitute an investment contract or securities transaction under the Howey Test.” – SEC Official Statement, May 29, 2025
Ethereum, alongside other PoS Layer 1 networks such as ADA and SOL, could benefit positively from this move. The SEC’s clarification is anticipated to drive renewed interest from institutional investors previously deterred by legal ambiguities.
Historically, aggressive SEC enforcement had depressed staking-related investments in the U.S. The new guidance is expected to reverse this trend, potentially boosting both on-chain activity and institutional flows.
Industry insight suggests this could lead to a surge in Total Value Locked (TVL) and increased participation in staking. Past enforcement actions stifled market growth; however, regulatory consistency may invigorate institutional ETFs and exchange products related to crypto staking.
Further developments may see alterations in custodial staking arrangements, where rules may be applied differently based on asset control. The announcement presents opportunities and challenges for all stakeholders involved.
