US SEC clarifies: Cryptocurrency staking protocol is not a security

• Staking on PoS networks is not a security offering
• SEC details rules for solo and custodial staking
• Staking rewards are payment for services to the network

The United States Securities and Exchange Commission (SEC) has stated that certain packing list Staking operations on proof-of-stake (PoS) networks do not fall within the legal definition of a securities offering under federal law. The statement was released on May 29 by the SEC’s Division of Corporation Finance and brings relief to node operators and institutions that offer staking-related services.

According to the statement, participants who operate validator nodes and stake their own assets are not required to register these operations or seek exemptions from the SEC. The rule also applies to self-custodial staking models — when a third party simply connects the user’s assets directly to the network — and to cases where a custodian acts on behalf of the investor without making decisions about the amounts or timing of staking.

The Division noted that rewards generated by these activities should be viewed as payments for services rendered to the network, not as profits derived from the efforts of third parties. “Payments to the Node Operator are compensation for services provided, not returns on an investment managed by others,” the text highlights.

In cases where a custodian is involved, the SEC clarifies that the custodian only executes orders and does not decide how the assets are used, reinforcing that there are no elements that characterize investment contracts. In addition, activities such as early unbundling, asset aggregation and different payment schedules were classified as operational, without a business or managerial nature.

The move comes amid a growing debate between regulators and crypto industry participants. Major industry players, including members of the Proof of Stake Alliance (POSA), have asked the SEC for formal guidance on the issue, arguing that crypto staking should be treated as a technical function, not a traditional financial investment.