The U.S. Securities and Exchange Commission (SEC) has finally broken its silence on one of crypto’s most contentious issues: Proof-of-Stake (PoS) staking. In a move that stunned both skeptics and supporters, the SEC has officially clarified that PoS staking, when conducted by individuals or decentralized protocols, does not constitute a securities transaction.
This long-awaited guidance could reshape the American crypto landscape, unlocking new opportunities for both retail and institutional players.
For years, the SEC’s ambiguous stance on staking cast a shadow over U.S. DeFi innovation. In 2023 and 2024, high-profile enforcement actions against exchanges like Kraken and Coinbase rattled the industry. Regulators argued that pooled staking services might violate securities laws, leading to multi-million dollar settlements and the delisting of staking products for American users. The chilling effect was immediate: U.S. participation in on-chain staking plummeted, and ETF issuers shelved plans to offer staking rewards.
But the new guidance, released in May 2025, marks a dramatic policy reversal.
According to the SEC’s statement, “When an individual or decentralized protocol participates in Proof-of-Stake consensus and receives rewards, such activity does not, in itself, constitute an investment contract or securities transaction under the Howey Test.”
The agency emphasized that this applies to direct, non-custodial staking, while centralized, pooled staking programs may still be subject to additional scrutiny.
“This is a watershed moment for U.S. crypto. The SEC finally admits what we’ve argued for years: staking is not a security!”
— @jchervinsky (Jake Chervinsky, crypto policy expert), May 29, 2025
What Changes for Retail Stakers?
We spoke with U.S. tax attorney Lisa Bragg, who explained: “For retail investors, this means you can stake ETH, SOL, or other PoS assets directly from your wallet without worrying about violating securities laws. The main tax treatment — staking rewards as ordinary income remains, but the regulatory risk is gone. Expect a surge in U.S. on-chain participation this quarter.”
ETF issuers are also celebrating. BlackRock and Fidelity, both of whom have filed for spot ETH ETFs with staking features, can now move forward without fear of SEC pushback. “We expect to see staking rewards added to ETF products before year-end,” said ETF analyst Nate Geraci on X.
“SEC’s staking clarification clears the path for ETH ETFs with yield. U.S. DeFi just got a green light!”
Ripple Effects: DeFi, Exchanges, and Global Markets
The SEC’s move is expected to reignite U.S. DeFi innovation. Protocols like Lido, Rocket Pool, and native staking on Ethereum and Solana are likely to see a flood of new users. U.S. exchanges may cautiously relaunch non-custodial staking products, while ETF issuers can confidently add yield features to their offerings.
Global markets are watching closely. The U.K., EU, and Singapore have already taken a lighter approach to staking, and the SEC’s shift could spark a new wave of regulatory harmonization.
Key Takeaways
The SEC’s confirmation that PoS staking is not a securities transaction is a historic win for U.S. crypto. It removes a major regulatory overhang, paves the way for on-chain yield products, and could put the U.S. back at the forefront of DeFi innovation. For retail stakers, ETF issuers, and the entire crypto ecosystem, the future just got a lot brighter.
