Advocacy groups urge the SEC to treat staking as a technical process, not a securities issue.
Nearly 30 crypto advocacy organisations, led by the Crypto Council for Innovation (CCI), have called on the U.S. Securities and Exchange Commission (SEC) to provide clear regulatory guidance on crypto staking. In a letter dated 30 April to SEC Commissioner Hester Peirce, the group — particularly its Proof of Stake Alliance (POSA) division — argued that staking is a technical mechanism essential to blockchain networks, not an investment activity.
“Staking isn’t niche — it’s the backbone of the decentralised internet,” the letter stated, pushing back against regulatory ambiguity that has surrounded the issue for years.
Why the Industry Says Staking Isn’t a Security?
The coalition claims that staking doesn’t meet the Howey test, the SEC’s standard for determining what constitutes an “investment contract.” According to the POSA, crypto users retain full ownership of their assets while staking. More importantly, the rewards are determined by blockchain protocols, not by managerial efforts of third-party providers.
Because of this, the group believes staking is fundamentally different from traditional financial products that fall under securities law. They have asked the SEC to take a principles-based approach, similar to its guidance on proof-of-work mining, rather than applying rigid disclosure requirements.
Staking in ETFs: Industry Pushes for Innovation?
The letter also highlighted the potential for staking in exchange-traded products (ETPs) and urged the SEC not to block innovation through overly prescriptive rules. The industry coalition argued that staking features could be responsibly included in crypto ETFs without creating investor risks.
So far, the SEC has yet to approve any crypto staking ETF. In April, it delayed a decision on whether Grayscale could include staking in its spot Ether ETF. Despite the delay, Bloomberg ETF analyst James Seyffart recently predicted that a staking-enabled Ether ETF could launch as early as May.
Big Backers Behind the Campaign?
The Proof of Stake Alliance includes major players in the crypto world, such as venture capital giant Andreessen Horowitz (a16z), blockchain developer Consensys, and crypto exchange Kraken — which reinstated its U.S. staking services earlier this year.
The coalition’s message is clear: existing securities regulations are not designed for blockchain-based staking services, and forcing them into that framework could harm innovation. “In the past four months, we’ve seen more constructive dialogue with the SEC than in the past four years,” the letter said, underscoring a newfound willingness for collaboration.
As regulators continue to weigh their next steps, the crypto industry is making a concerted push to shape the future of staking — and its place within U.S. financial regulation.
