Nearly 30 crypto advocate groups led by the lobby group the Crypto Council for Innovation (CCI) have asked the Securities and Exchange Commission for clear regulatory guidance on crypto staking and staking services.<\/p>\n
The CCI\u2019s Proof of Stake Alliance (POSA) group argued<\/a> in an April 30 letter to the agency\u2019s Crypto Task Force lead, SEC Commissioner Hester Peirce, that staking is fundamentally a technical process, not an investment activity.\u00a0<\/p>\n \u201cStaking isn\u2019t niche \u2014 it\u2019s the backbone of the decentralized internet,\u201d the letter<\/a> said.\u00a0<\/p>\n The letter responded to the SEC\u2019s call for public input on whether staking<\/a> and liquid staking, where crypto users lock up their tokens to earn more, should be regulated under federal securities laws.<\/p>\n The coalition called for the SEC to support responsible inclusion of staking features in exchange-traded products (ETPs), and \u201cavoid overly prescriptive rules that could freeze market structures and stifle innovation in the staking space.\u201d<\/p>\n The group argued that staking fails to meet the securities-defining Howey test<\/a> definition of an \u201cinvestment contract\u201d as stakers retain ownership of their assets.<\/p>\n Source: <\/em>Crypto Council for Innovation<\/em><\/a><\/p>\n They added that blockchain protocols, not a staking provider’s efforts, determine rewards, and providers don\u2019t deliver profits through managerial decisions like a company does.\u00a0<\/p>\n The letter requested that the SEC Issue principles-based guidance similar to recent SEC staff statements on proof-of-work mining.<\/p>\n \u201cIn the past 4 months, we\u2019ve seen more movement and constructive dialogue with the SEC than in the past 4 years,\u201d the group said. \u201cNow, the industry is stepping up with concrete principles to include in guidance \u2014 a reflection of this new collaborative approach.\u201d<\/p>\n Related: <\/strong><\/em>Ethereum ETF staking will have little impact without multimonth rally: Analyst<\/strong><\/em><\/a><\/p>\n The group argued that the existing securities disclosure regime is ill-suited for staking services, which are fundamentally technical rather than financial in nature.\u00a0<\/p>\n The Proof of Stake Alliance includes several high-profile crypto organizations and companies, including the venture capital firm Andreessen Horowitz (a16z), blockchain software firm Consensys, and the crypto exchange Kraken, which restored staking services<\/a> in the US earlier this year.<\/p>\n The SEC has yet to approve a crypto staking exchange-traded fund (ETF) and delayed the decision<\/a> on allowing staking for Grayscale\u2019s spot Ether ETF on April 14.<\/p>\n In April, Bloomberg ETF analyst James Seyffart predicted that an Ether ETF that includes staking could come as soon as May<\/a>.<\/p>\nBig names in support of staking clarity\u00a0<\/h2>\n