Everstake Seeks SEC Clarity on $193B Staking Services

Everstake, a prominent global provider of non-custodial staking services, has engaged in discussions with the US Securities and Exchange Commission (SEC) to clarify regulatory definitions surrounding staking in blockchain networks. This dialogue, which included the SEC’s Crypto Task Force, is crucial as over $193 billion in digital assets are currently staked across major proof-of-stake (PoS) networks. However, the legal status of staking in the US remains ambiguous, with regulators grappling to classify it under existing securities laws.

In the past, the SEC has taken enforcement actions against major players like Kraken, Coinbase, and Consensys due to their staking services. These actions were later dismissed under the pro-crypto administration of President Donald Trump. During the recent meeting, Everstake argued that non-custodial staking should not be classified as a securities transaction. The company emphasized that users retain full control over their digital assets throughout the staking process, making it a technical function rather than an investment product.

“Our main assertion is that staking is not a financial instrument or security transaction, but rather a technical process, a base-layer protocol mechanism—akin to an oracle in a database—that maintains the integrity and functionality of decentralized networks,” stated Sergii Vasylchuk, the founder of Everstake. This perspective underscores the technical nature of staking, which is essential for the operation of decentralized networks.

In a letter submitted to the SEC’s Crypto Task Force on April 8, 2025, Everstake called for regulatory clarity on non-custodial staking and custodial and liquid staking models. The letter, a response to Commissioner Hester Peirce’s call for input on regulatory treatment of blockchain services, argued that non-custodial staking should not be considered a securities offering. Everstake highlighted that in their model, users delegate only validation rights while maintaining ownership of their digital assets. The staking rewards are algorithmically distributed by the blockchain network itself, with Everstake providing only technical infrastructure.

The letter also detailed why non-custodial staking fails each prong of the Howey test, a legal framework used to determine whether certain transactions qualify as investment contracts. Everstake argued that users do not make an investment of money in a common enterprise, do not expect profits from Everstake’s efforts, and are not dependent on the company’s management for financial returns. Instead, any rewards come from network-level incentives and fluctuate with the market value of the underlying asset.

Everstake proposed specific criteria that should exempt non-custodial staking from securities classification. These include user asset control, absence of pooled funds, permissionless unstaking, and the provision of purely technical services. The company likened non-custodial staking to proof-of-work mining, which the SEC has previously ruled out as a securities transaction. Margaret Rosenfeld, Everstake’s chief legal officer, emphasized that “with non-custodial staking, there’s no handover of assets, no investment contract, and no third-party risk.” She added that treating it as a securities offering undermines the decentralized model and risks chilling innovation in the blockchain sector.

Despite these arguments, the SEC has not yet taken a definitive stance on staking guidance. Rosenfeld noted that the agency did not make any “specific commitments” on staking guidance but continues to engage with industry stakeholders. The Task Force is actively gathering input from a range of stakeholders, including those involved with non-custodial staking, ETFs, and broader blockchain infrastructure. In an April 30 letter to the SEC, nearly 30 crypto advocate groups led by the lobby group the Crypto Council for Innovation (CCI) also asked the agency for clear regulatory guidance on crypto staking and staking services.