This announcement could be a game-changer. For years, there\u2019s been confusion about whether staking\u2014especially in proof-of-stake networks\u2014counts as offering or selling securities. Now, the SEC says that typical protocol staking does not<\/em> fall under the Securities Act of 1933 or the Securities Exchange Act of 1934.<\/p>\n\n\n\n Protocol staking is when someone locks up their cryptocurrency to help secure a blockchain network. These networks rely on a “consensus mechanism” that helps participants agree on the state of the network and verify transactions. In return for staking, users often earn rewards.<\/p>\n\n\n\n The SEC explained that when crypto assets are locked into a system that depends on them for technical operations\u2014not for investment purposes\u2014this doesn’t meet the legal definition of a security.<\/p>\n\n\n\n This applies to three types of staking:<\/p>\n\n\n\n The SEC\u2019s guidance does not<\/em> apply to more complex practices like liquid staking or restaking. These methods often involve providers who have more control over user funds. Because of that control, they could still fall under securities laws.<\/p>\n\n\n\n The SEC added that the guidance focuses only on general protocol staking and doesn\u2019t cover every variation. That means there may still be gray areas, especially for newer staking models.<\/p>\n\n\n\n It\u2019s important to note that this is staff guidance\u2014it reflects the SEC staff\u2019s view, but it\u2019s not legally binding. And not all SEC commissioners are on board.<\/p>\n\n\n\n Commissioner Caroline Crenshaw strongly disagreed with the decision. She said it conflicts with past court rulings, including legal battles involving big crypto exchanges like Kraken and Coinbase. Crenshaw warned that this new direction could cause even more confusion about which crypto activities are legal and which are not.<\/p>\n\n\n\n \u201cRather than promote clarity, this approach continues to sow uncertainty around what the law is,\u201d she wrote in her official statement.<\/p>\n\n\n\n Many in the crypto industry welcomed the news. Michael Bacina, an executive from the think tank Global Digital Finance, praised the move.<\/p>\n\n\n\n \u201cThe SEC\u2019s process is more transparent than most global regulators, which is a strength of the U.S. system,\u201d he said. Bacina also noted that staking without giving up control of your assets shouldn’t be treated the same as risky investments.<\/p>\n\n\n\n Crypto companies have been urging the SEC to clearly separate technical staking functions from investment contracts. They argue that staking is essential to blockchain operations and isn\u2019t about profiting from someone else\u2019s work.<\/p>\n\n\n\n The new SEC guidance may provide some relief to crypto projects and staking service providers. By drawing a line between passive investment and network participation, it gives clearer rules for staking in proof-of-stake systems.<\/p>\n\n\n\n But with opposing voices inside the SEC and legal battles still playing out, the debate over how crypto should be regulated is far from over.<\/p>\n\n\n\n For now, the guidance is a step forward\u2014but not the final word.<\/p>\n","protected":false},"excerpt":{"rendered":" In a big move for the crypto world, the U.S. Securities and Exchange Commission (SEC) released new guidance on Thursday, … <\/p>\nWhat Is Protocol Staking?<\/h3>\n\n\n\n
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What\u2019s Not Included?<\/h3>\n\n\n\n
Not Everyone Agrees<\/h3>\n\n\n\n
Industry Reactions<\/h3>\n\n\n\n
What This Means for Crypto<\/h3>\n\n\n\n