In a significant shift for U.S. cryptocurrency policy, the Securities and Exchange Commission (SEC) announced on May 29 that most staking activities on proof-of-stake (PoS) blockchains will no longer be treated as securities transactions. This clarification represents a major departure from the Commission’s previous stance under former Chairman Gary Gensler, whose regulatory approach was widely viewed as aggressive towards crypto activities.
The SEC’s latest position was outlined in a public statement titled “Providing Security is not a ‘Security,’” authored by Commissioner Hester Peirce alongside the Division of Corporation Finance. While not legally binding as a rule, this statement does indicate a broader shift in regulatory thinking, potentially fostering innovation and encouraging greater engagement with staking activities from American developers, investors, and service providers.
Commissioner Peirce specifically stated that “certain proof-of-stake blockchain protocol staking activities are not securities transactions within the scope of the federal securities laws.” She emphasized that staking, in essence, is a voluntary practice undertaken by participants to help secure blockchain networks. Her statement indicates that previous interpretations under the Gensler era created “artificial constraints,” hindering decentralization efforts and the overall credibility of these blockchain ecosystems.
The new interpretation broadly applies to individual stakers, delegated proof-of-stake participants, and both custodial and non-custodial staking-as-a-service providers. The Commission explicitly noted in its release that related or ancillary services provided alongside staking, such as slashing coverage to reclaim staked assets early, are also not considered securities offerings. This approach closely mirrors earlier SEC decisions which excluded cryptocurrency mining operations from securities regulation.
The clarification is part of a broader trend that began in early 2025, marking a post-Gensler regulatory era initiated by President Donald Trump’s directive towards a looser stance on the crypto sector. Notably, the SEC has largely abandoned Gensler’s earlier sweeping classification of various cryptocurrencies as unregistered securities, a practice that previously led to numerous legal disputes and stunted sector growth.
Industry reaction to the SEC’s announcement underlines its considerable strategic significance—although the wider crypto markets showed limited immediate reaction in terms of token price movements. The Crypto Council for Innovation, a prominent crypto advocacy group, highlighted via social media that the SEC’s clarification established staking explicitly as a fundamental operational tool for blockchain technology networks, distinct from speculative investment contracts. Alison Mangiero, responsible for staking policy at the council, publicly welcomed the Commission’s acknowledgment of staking’s proper technical and security-focused purpose.
Despite the policy shift, reaction amongst retail traders and crypto enthusiasts online was somewhat muted, reflecting a lingering confusion about its immediate market implications. With the recent narrative largely dominated by Bitcoin and stablecoins, proof-of-stake blockchains, including Ethereum, faced declining prominence and price pressure throughout the past year. However, indicators suggest consistent underlying growth in staking participation despite market conditions. According to industry data compiled at the end of 2024, Ethereum’s staking ratio climbed to 28%, while other major PoS platforms, like Solana, Cosmos, and Polkadot, maintained even higher staking ratios exceeding 50%.
Recent innovation within staking protocols, enabling more liquidity and flexibility while addressing traditional limitations of token lock-up periods, is expected to further encourage user participation. The SEC’s recent guidance, though not binding legislation, could significantly diminish longstanding U.S. regulatory ambiguity, thereby setting clearer grounds for innovation and blockchain infrastructure development.
Although it has not immediately sparked rallying token prices or wider mainstream headlines, the SEC’s revised stance lays a critical regulatory framework. It represents a crucial, if subtle, victory that may strengthen and accelerate blockchain deployments in the United States while reaffirming decentralization as a fundamental technology value.
