SEC Clarifies Crypto Staking Rules, Exempts 75% of Activities from Securities Laws

The U.S. Securities and Exchange Commission (SEC) has provided much-needed clarity on the legal status of crypto staking. On May 29, 2025, the agency issued formal guidance confirming that certain types of staking tied directly to blockchain networks are not considered securities. This decision settles years of uncertainty for investors, developers, and staking service providers, who previously risked falling foul of securities laws without knowing exactly where the line was drawn.

The SEC's new guidance outlines which staking activities are permissible and which are not, effectively distinguishing between legitimate staking and activities that resemble investment contracts. The rules clarify that solo staking, delegated staking, and custodial staking, when directly tied to a network’s consensus process, do not qualify as securities offerings. This means that rewards earned from network validation are seen as compensation for services, not profits from the efforts of others, thereby removing them from the Howey test classification. Validators, node operators, and retail or institutional stakers can now participate without fear of regulatory uncertainty, encouraging wider adoption of PoS networks.

The guidance explicitly permits solo staking, where individuals use their own resources and infrastructure to stake their crypto assets. Delegated staking is also allowed, provided users delegate their validation rights to third-party node operators while retaining control of their crypto assets and private keys. Custodial staking is permissible if custodians, such as crypto exchanges, stake on behalf of users with clear disclosure and transparency. Additionally, running validator services is viewed as providing technical services rather than investing in a third party’s business.

The SEC's guidance also addresses ancillary services in crypto staking, such as slashing coverage, early unbonding, flexible rewards schedules, and asset aggregation. These services are considered administrative or ministerial and do not involve entrepreneurial or managerial efforts, thereby remaining compliant with the new rules.

The new regulations benefit various stakeholders in the PoS ecosystem. Validators and node operators can stake assets and earn rewards without registering under securities laws, reducing legal risks. PoS network developers and protocol teams can grow their projects without altering token economics or compliance structures. Custodial service providers can operate legally by clearly disclosing terms and keeping assets in separate, non-speculative accounts. Retail investors and institutional participants can engage in solo or delegated staking with greater assurance, encouraging compliance-focused institutions to join the PoS ecosystem.

However, the SEC draws a clear line between legitimate staking and activities that resemble investment contracts. Yield farming or staking schemes not tied to consensus, bundled, opaque DeFi staking products promising ROI, and centralized platforms disguising lending as staking remain outside the purview of the guideline and may be treated as securities offerings.

The SEC's 2025 guideline is a significant step for crypto staking in the U.S., offering clear rules for staking in PoS protocols. By prioritizing transparency, self-custody, and alignment with decentralized networks, the SEC's approach could foster the growth of PoS ecosystems while discouraging risky or unclear staking practices. This framework allows individual validators and users to delegate tokens to third-party node operators to operate, as long as they maintain control or ownership of their assets. The SEC considers staking rewards as payment for services, not profits from managerial efforts, exempting them from the Howey test. This creates a stable foundation for compliant staking infrastructure, encouraging institutional adoption, innovation in staking services, and greater retail participation.