On the day of May 29th, 2025, the U.S. Securities and Exchange Commission (SEC) introduced additional guidance regarding crypto staking. Their aim is to provide regulatory certainty in the fast-changing world of digital assets. The SEC’s Division of Corporation Finance just posted helpful guidelines. These new guidelines provide clear examples of when protocol staking on Proof-of-Stake (PoS) networks will not be considered a securities offering. This guidance, at least, is a positive step toward establishing a clear set of boundaries around the bounds of permissible crypto activities in the United States.

The new framework will only apply to solo staking and delegating to third-party validators. It goes on to include custodial arrangements, provided these approaches are explicitly linked to the network’s consensus mechanism. Regulators view this decision as a positive signal to the U.S. crypto industry. For consumers, it paves a much clearer path for participation in PoS networks. Individual validators and consumers of staking services should be aware of these developments in order to stay on the right side of the U.S. regulatory environment.

This article will examine how regulators will treat crypto staking under the new rules, which activities remain restricted, who stands to benefit, and what practices to avoid to stay compliant.

Understanding the SEC's Staking Guidelines

Luckily, the SEC’s Division of Corporation Finance has provided direct guidance on that very issue. They explain that particular staking activities on PoS networks—when performed as a function of the network’s consensus process—are not securities offerings. This clarification removes a significant legal ambiguity that has until now prevented many from participating in the crypto-innovation space.

"The SEC has clarified that solo staking, delegated staking and custodial staking, when tied directly to a network’s consensus process, do not qualify as securities offerings." - source

For all these reasons, the guidance stresses that staking methods must be directly tethered to the network’s consensus process to qualify as staking. The benefits you receive from verifying network transactions are payment for the work you’re doing. Their returns aren’t profits earned off the labor of other people.

The SEC considers staking rewards as payment for services, not profits from managerial efforts, exempting them from the Howey test. Understanding this distinction is incredibly important. It shifted the conception of staking rewards to be viewed not as an investment return, but rather a compensation for the provision of technical services.

Implications for Staking Participants

The new guidelines have far-reaching impacts on PoS validators, creators, and platforms alike. Second, the SEC further clarified that self-staking, self-custodial staking, and certain custodial staking relationships do not constitute securities offerings.

The framework gives individual validators and users the flexibility to delegate their tokens to third-party node operators. The key promise of social equity, though, is that they can do this and maintain control over their assets. This configuration allows for a more decentralized and secure network, including having a greater number and diversity of validators.

"This framework allows individual validators and users to delegate tokens to third-party node operators to operate, as long as they maintain control or ownership of their assets." - source

These regulations will motivate additional individuals to take the jump into staking. This will ultimately increase the security and decentralization of PoS blockchains by expanding the number and diversity of available validators. This increased diversity makes PoS networks healthier and more resilient overall.

Activities Outside the Guidelines

The SEC’s guidance does a good job of explaining what staking activities are covered. It’s a daunting picture of where is still off limits. Any centralized platform that hides lending under the pretense of staking would not pass under these updated rules. As a result, they might be viewed as unregistered securities.

"Yield farming or staking schemes not tied to consensus" - source

These platforms often promise high returns without directly contributing to the network's consensus process, raising concerns about their compliance with securities laws. Such schemes can be seen as investment contracts, thus compelling them to register with the SEC.

It is crucial for participants to differentiate between legitimate staking activities tied to network validation and schemes that merely offer high yields without contributing to network security. Engaging in the latter could open participants to significant legal and financial liabilities.

The Evolution of Staking

The basic idea behind staking goes all the way back to 2012 with the launch of Peercoin, the very first PoS blockchain. Unlike mining, staking allows users to "stake" coins to validate transactions, inspiring modern networks like Ethereum Consensus Layer and Cardano to prioritize energy efficiency and broader participation.

"Did you know? The concept of staking dates back to 2012 with Peercoin, the first PoS blockchain. Unlike mining, it lets users “stake” coins to validate transactions, inspiring modern networks like Ethereum Consensus Layer and Cardano to prioritize energy efficiency and broader participation."

It allows you to earn 5%-20% annual returns on tokens such as Cosmos or Tezos, providing cryptocurrency holders with a new source of passive income. Compared to trading, this approach takes no time at all. You just stake your tokens, help secure the network, and get rewarded — a simple process that appeals to many long-term investors.

"Did you know? Staking can yield 5%-20% annual returns on tokens like Cosmos or Tezos, offering crypto holders passive income. Unlike trading, it is low-effort — lock tokens, support the network and earn rewards — making it a popular choice for long-term investors."

Solo staking still involves needing to run your own node, usually with a high token minimum, such as 32 Ether (ETH) for Ethereum. Staking pools allow users to group smaller amounts together, democratizing access to staking.

"Did you know? Solo staking requires running your own node, often with high minimum token requirements, like 32 Ether (ETH) for Ethereum. Staking pools let users combine smaller amounts, democratizing access."

Since the May 29 guideline, incentives received from validating transactions on the network are considered payment for services rendered. This change makes them no longer profits from others’ efforts, the Howey test classification. Underwriting these actions is not seen as providing a technical service, but rather an outsized investment in the business of a third party.

Staying Compliant

Whether you’re a solo validator, or whether you use a staking service, these are important updates to be aware of. Keeping your business compliant in the US goes a long way! The SEC’s most recent action provides much-needed clarity about what kinds of staking are permissible and what kinds are not.

"Whether you are a solo validator or using a staking service, understanding these updates is key to staying compliant in the US." - source

"The SEC’s latest move clearly outlines which types of staking are allowed and which are not." - source

Individuals working as solo validators and those using staking services should continue to watch for further developments to keep themselves on the right side of US laws. For these staking methods to be valid, they need to be directly tied to the network’s consensus process.