SEC Affirms Crypto Staking is Not in Violation of U.S. Securities Law
The SEC's latest statement confirms that certain staking activities do not contravene U.S. securities regulations.
SEC Affirms Crypto Staking is Not in Violation of U.S. Securities Law
The SEC’s latest statement confirms that certain staking activities do not contravene U.S. securities regulations.
What to know:
- The SEC announced a staff statement asserting that staking does not violate the securities law.
- The statement allows companies to offer services like staking, custodial services, and more, according to experts.
- This marks the latest in a series of official yet non-binding communications from the regulator.
Crypto staking appears compliant with U.S. securities law under specific conditions, as outlined by the SEC’s Division of Corporation Finance late Thursday. The statement clarified that staking operations do not constitute the offer and sale of securities, implying that participants in these activities will not face legal actions from the SEC.
Node operators, validators, custodians, and entities staking assets individually or with third parties are included within this framework. The SEC’s approach may equate staking practices to mining, similar to how it regards Bitcoin operations. BTC was mentioned at $105,987.00 by the SEC in comparison to traditional mining that previously received a clear standing with the laws.
Lorien Gabel, CEO of the staking-focused firm Figment, noted that the SEC’s declaration is significantly straightforward regarding a complex issue, likely reassuring companies that have refrained from certain activities in previous times.
Staking Services and Regulatory Clarity
The SEC statement facilitates a range of ancillary staking services, allowing companies to offer comprehensive support without being classified as asset managers, which Gabel confirmed.
According to Alison Mangiero, from the Crypto Council for Innovation, this update is crucial, suggesting consistent treatment for stakers akin to miners. The timing of this announcement is also significant, coming right before the SEC’s deadline for applications related to staking in spot ether ETFs, indicating potential acceleration in the approval process.
The staff statement is narrowly designed, with specific limitations, and holds no legal authority by itself. It primarily addresses activities involving crypto assets without intrinsic economic properties, such as generating passive returns or providing rights to future income.
For further details, check the SEC staff statement.
