Everstake Advocates for Non-Custodial Staking Recognition to SEC

Everstake, a prominent blockchain validator, has engaged in discussions with the United States Securities and Exchange Commission’s (SEC) Crypto Task Force. The primary objective of these talks is to advocate for the recognition of non-custodial staking as a technical process rather than a securities transaction. This initiative comes at a time when over $193 billion worth of assets have been staked on proof-of-stake (PoS) chains, yet the regulatory landscape in the U.S. remains ambiguous.

The SEC, under its previous leadership, had targeted major players such as Kraken, Coinbase, and Consensys for their staking products. However, with the current administration's more crypto-friendly stance, some of these actions have been withdrawn. Despite this shift, the SEC has not provided a clear statement on non-custodial staking, leaving the industry in a state of uncertainty.

Everstake has emphasized to regulators that its model allows users to retain full ownership of their tokens. Users delegate validation rights but do not transfer ownership. Sergii Vasylchuk, the founder of Everstake, stated that "staking is not a financial instrument or security transaction, but rather a technical process, similar to an oracle in a database."

In a formal letter submitted to the SEC on April 8, 2025, Everstake responded to Commissioner Hester Peirce’s call for stakeholder input. The letter detailed why non-custodial staking should not be subject to securities laws. Key points included that users retain ownership of their assets, do not commingle funds, are not promised profits from a managing entity, and receive rewards from algorithms at the network level.

Everstake argued that non-custodial staking satisfies all four prongs of the Howey test for securities status. The firm compared its model to proof-of-work mining, which has not been treated as a securities activity by the SEC. Margaret Rosenfeld, Chief Legal Officer, stated that applying securities law to staking would “undermine the decentralized model and risk chilling innovation.”

In a second letter on April 30, nearly 30 crypto advocacy groups, led by the Crypto Council for Innovation, also urged the SEC to bring clarity to rules for crypto staking. While the SEC has not made any assurances of comprehensive guidelines, it continues to engage with stakeholders from across the crypto ecosystem, including ETF and infrastructure providers.

Everstake’s efforts are indicative of the broader industry’s push for a definitive and functional regulatory environment. This environment would support staking models that align with the technical reality of decentralized networks, fostering innovation and clarity in the crypto space.