Nearly 30 crypto advocate groups led by the Crypto Council for Innovation (CCI) have called on the Securities and Exchange Commission (SEC) to provide clear rules and guidelines for crypto staking and related services.
The CCI’s Proof of Stake Alliance (POSA) group sent a letter on Apr. 30 to SEC Commissioner Hester Peirce, who leads the agency’s Crypto Task Force, arguing that staking is fundamentally a technical process rather than an investment activity. The letter said staking isn’t just a niche concept; it’s the foundation of the decentralized internet.
The letter replied to the SEC’s request for public feedback on whether staking and liquid staking, where crypto users lock up their tokens to earn rewards, should be governed under federal securities regulations.
Staking isn’t a security, crypto firms tell SEC
The coalition urged the SEC to support the responsible integration of staking features in exchange-traded products (ETPs) and to avoid overly strict rules that could freeze market dynamics and stifle innovation in the staking sector.
The group argued that staking doesn’t qualify as an “investment contract” under the Howey test because those who stake their assets still maintain their ownership. Additionally, they explained that it’s the blockchain protocols, not the staking provider’s actions, that determine rewards.
Providers don’t generate profits through business decisions like a company would. The letter requested the SEC to provide guidance based on principles, similar to the recent staff statements the SEC made regarding proof-of-work mining. The group said:
In the past 4 months, we’ve seen more movement and constructive dialogue with the SEC than in the past 4 years. Now, the industry is stepping up with concrete principles to include in guidance — a reflection of this new collaborative approach.
The group argued that the current rules for the securities disclosure regime are inadequate for staking services, as these services are more technical than financial.
The Proof of Stake Alliance includes major names in the crypto world, like the investment firm Andreessen Horowitz (a16z), blockchain company Consensys, and crypto exchange Kraken. The firm brought back its staking services in the U.S. earlier this year.
