Crypto ETFs and Staking: What the SEC’s New Rules Mean

Crypto ETFs- SEC Provides Regulatory Clarity

Crypto ETFs– In a move that could reshape the landscape for crypto ETFs, the U.S. Securities and Exchange Commission (SEC) has provided long-awaited clarity on the regulatory status of protocol staking. The Division of Corporation Finance issued a statement on May 29, 2025, confirming that certain types of staking activities do not constitute securities offerings under federal law.

Staking Is Not a Securities Offer, Says SEC Division

The statement outlines that “Protocol Staking Activities”—including solo staking, self-custodial staking via third-party validators, and custodial staking on behalf of clients—do not fall under the definitions of securities in the Securities Act of 1933 or the Exchange Act of 1934.

“It is the Division’s view that ‘Protocol Staking Activities’… do not involve the offer and sale of securities,” the SEC noted. Ancillary services such as early withdrawal options or slashing insurance are also excluded from securities classification, as the rewards come from the protocol itself—not third-party efforts.

This stance aligns with the SEC’s March 2025 clarification on proof-of-work mining and is seen as a major win for proof-of-stake (PoS) networks and service providers. SEC Commissioner Hester Peirce supported the statement, saying, “Providing security is not a security.”

Potential Impact on Crypto ETFs

Industry figures see this as a breakthrough for crypto ETF issuers. “This is a big deal for ETF providers who want to offer staking,” said Eleanor Terrett, host of Crypto in America. Jito Labs’ CLO Rebecca Rettig echoed the sentiment.

However, not all within the SEC agree. Commissioner Caroline Crenshaw criticized the statement, arguing it contradicts prior court rulings that classify staking-as-a-service models as investment contracts under the Howey test, and therefore subject to securities regulations.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.