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ARTICLE · 04 JUNE 2025

SEC Staff Clarifies That Certain Staking Activities Are Not Securities

Lowenstein Sandler LLP
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Historically, the SEC has taken issue with certain staking activities under the federal securities laws. The SEC previously alleged that staking-as-a-service programs were investment contracts under the test set forth...

United StatesTechnology
Ethan L. Silver
Ethan L. Silver
William Brannan
William Brannan
Macauley Venora
Macauley Venora
Leo B. Choi
Leo B. Choi
Aiden D. O'Leary
Aiden D. O'Leary

What You Need To Know:

  • The United States Securities and Exchange Commission's (SEC) Division of Corporation Finance (the Division) has released a statement (the Statement) on the application of the federal securities laws to "staking activities"—specifically, activities that involve staking crypto assets (Crypto Assets) on a blockchain network with a 'Proof-of-Stake' consensus mechanisms (a PoS Network) (Protocol Staking).
  • The Division takes the position that certain Protocol Staking Activities, such as (i) self-staking, (ii) self-custodial staking with a third-party node operator, and (iii) custodial staking through a qualified third-party on behalf of the owners of Crypto Assets (collectively, Protocol Staking Activities), do not involve an "offer or sale of securities" and thus do not trigger registration requirements.

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