Crypto Industry Pushes for Clearer Regulations on Staking
Crypto Council Writes Letter to Securities and Exchange Commission, Requesting Definitive Guidance on Crypto Staking Regulations
In a recent move, the Crypto Council for Innovation (CCI)'s Proof of Stake Alliance (POSA), accompanied by 30 significant cryptocurrency exchanges, penned a letter to SEC Commissioner Hester Peirce on April 30, 2025. The open letter aimed to prompt more favorable regulations for cryptocurrency, primarily focusing on staking and liquid staking. The letter was in response to Commissioner Peirce's request for public opinion regarding whether these practices should be governed by federal securities regulations.
The group contends that staking, akin to proof of work mining, should not be deemed an investment activity. Instead, they propose that staking is a technical procedure that secures the blockchain, aided by participants who validate transactions and help maintain the network in exchange for rewards proportional to the staked cryptocurrency.
While acknowledging the risks inherent in the staking process, the group asserts that these perils derive from the staking process itself rather than financial investments. The group advocates for the inclusion of staking in exchange-traded products (ETPs) to be handled responsibly, warning against overly restrictive rules that could curb innovation.
The letter also points out how countries like Canada and the United Kingdom have supplied regulatory clarity on staking. Additionally, the SEC itself has addressed the matter of mining activities back in March. The CCI urges the SEC to paralleled these moves and bring clarity to the regulatory framework surrounding staking services.
Read more about this topic in Canary Capital's Application for the First-Ever Staked SEI ETF with the SEC.
A Closer Look: Staking in Cryptocurrency
- SEC's Perspective on Staking: The SEC is currently seeking public input on staking and liquid staking regulations. The Crypto Council for Innovation (CCI) and its alliance, along with 30 major exchanges, have called for clearer, more favorable regulations, arguing against classifying staking as a securities activity [1][2][3].
- Shift in SEC's Attitude: Previously, staking was treated as a financial security, resulting in lawsuits against companies such as Coinbase and Kraken. However, with a more cryptocurrency-friendly administration, there's optimism for more supportive and clearer regulations, comparable to those applied to proof-of-work mining [2][5].
- Recent Developments: The SEC has yet to officially clarify its stance on staking, but its active solicitation of public opinion suggests a potential shift in its regulatory approach. Kraken recently reinstated its staking services following a settlement with the SEC, indicating a possible change in regulatory tactics [2].
International Comparisons
- Canada: Canada has supplied regulatory clarity on staking, using principles-based guidance. This clarity empowers Canadian companies to operate with greater certainty in the digital asset sector [3].
- United Kingdom: The U.K. has also made strides in clarifying its view on staking, providing a more welcoming environment compared to the U.S.'s current uncertainty. The lack of clarity in the U.S. has raised concerns that the lack of clarity could drive innovation overseas [3].
Forecasting the Future
The industry hopes that by implementing clear, principles-based regulations, the U.S. can continue to compete in the global digital asset market. Despite delays in approving ETFs that incorporate staking, there's optimism for future approvals, particularly given the growing interest in Ethereum staking and the potential for staked ETFs [3][5].
[1] - Business Insider (2025). "CCI and 30 Major Exchanges Urge SEC to Regulate Cryptocurrency Staking". Retrieved from https://www.businessinsider.com/cci-exchanges-securities-regulations-staking-crypto
[2] - Coin Desk (2025). "SEC Pushes for Public Input on Staking Regulations". Retrieved from https://www.coindesk.com/securities-exchange-commission-staking-regulations
[3] - The Block (2025). "Canary Capital Files for First-Ever Staked SEI ETF with SEC". Retrieved from https://www.theblockcrypto.com/post/874084/canary-capital-files-for-first-ever-staked-sei-etf-with-sec
[4] - Cointelegraph (2025). "Kraken Returns to Staking Services Following SEC Settlement". Retrieved from https://cointelegraph.com/news/kraken-ceo-kraken-returns-to-staking-services-following-sec-settlement
[5] - Decrypt (2025). "SEC's New Leadership Signals Potential for More Crypto-Friendly Regulations". Retrieved from https://decrypt.co/resources/sec-s-new-leadership-signals-potential-for-more-crypto-friendly-regulations
- The Crypto Council for Innovation (CCI) and its alliance, along with 30 major cryptocurrency exchanges, have requested clearer, more favorable regulations from SEC Commissioner Hester Peirce regarding staking and liquid staking.
- In the open letter, the group asserts that staking, a process that secures the blockchain, should not be deemed an investment activity, but rather, a technical procedure.
- They warn against overly restrictive rules that could curb innovation, citing countries like Canada and the United Kingdom, which have provided regulatory clarity on staking.
- The SEC is currently seeking public input on staking and liquid staking regulations, and the CCI urges the SEC to follow the examples set by Canada and the United Kingdom in bringing clarity to the regulatory framework surrounding staking services.
- The group also advocates for the inclusion of staking in exchange-traded products (ETPs) to be handled responsibly, acknowledging the risks inherent in the staking process but asserting that these perils derive from the staking process itself rather than financial investments.
- There's optimism for future approvals of ETFs that incorporate staking, particularly given the growing interest in Ethereum staking and the potential for staked ETFs, as the industry hopes that by implementing clear, principles-based regulations, the U.S. can continue to compete in the global digital asset market.
