SEC says the protocol that staking POS networks is not a securities

Table of Contents

Industry players, including BlackRock, recently met with the SEC’s Crypto Task Force to discuss staking capabilities and options trading in Crypto ETFs.

Key takeout

The SEC has revealed that protocols staking POS networks are not considered securities offerings.
Staking activities and related services are classified as administrative or ministers, not entrepreneurs.

The US SEC has revealed that the staking activities for certain protocols (POS) network does not constitute a securities offering under federal law.

in statement The department, issued by the SEC’s Corporation Finance division on May 29, said participants in protocol staking activities would not be required to register transactions with the committee under the Securities Act or are eligible for exemption from the registration requirements.

This guidance covers three types of staking activities in which node operators bet on their own crypto assets, independent staking directly with third parties, and custodians bet on custodians on behalf of the asset owner.

The department determined that it was “payment to the node operator in exchange for services offered to the network, not profits from other people’s entrepreneurs or management efforts.”

Due to the detention arrangement, the SEC said, “The administrator does not determine whether, when, or how much of the interest there is in the owner’s covered cryptocurrency. The custodian will only act as an agent in relation to dyeing the covered cryptocurrency deposited on behalf of the owner.”

This guidance also addresses supplementary staking services such as coverage thrashing, early irrelevant, alternative compensation payment schedules, and asset aggregation, which determines these as “administration or minister in nature” rather than entrepreneurs or management activities.

The SEC’s Crypto Task Force is actively involved in the industry through a series of roundtables focusing on a variety of key regulatory issues in the Crypto sector, including Incorporation.

Earlier this month, BlackRock met with the task force to discuss regulatory issues, ability to demonstrate capabilities, and options trading at Crypto ETFs.

A group of major crypto companies led by the Crypto Innovation Council and Stake Alliance Evidence (POSA) has urged the SEC to clarify that staking should not be regulated as security, not as investment activity.