TechFlow news, May 1 — According to Cointelegraph, nearly 30 crypto advocacy organizations led by the Crypto Council for Innovation (CCI) jointly sent a letter to the U.S. Securities and Exchange Commission (SEC), urging the agency to provide clear regulatory guidance on cryptocurrency staking and related services.
The CCI's Proof of Stake Alliance (POSA) emphasized in a letter dated April 30 to Hester Peirce, head of the SEC’s Crypto Task Force, that staking is fundamentally a technical process rather than an investment activity. The alliance stated: "Staking is not a niche activity—it is the backbone of a decentralized internet." The joint letter responds to the SEC’s prior public request for comments on whether staking and liquid staking (where users lock tokens to earn additional rewards) should be regulated under federal securities laws.
The alliance urges the SEC to support the responsible inclusion of staking features in exchange-traded products (ETPs) and to "avoid overly prescriptive rules that could freeze market structures and stifle innovation in the staking space." The group argues that staking does not meet the Howey Test's definition of an "investment contract" because stakers retain ownership of their assets. They add that rewards are determined by the efforts of blockchain protocols, not staking providers, and that providers do not generate profits through managerial efforts like companies do. The signatories request that the SEC issue principles-based guidance similar to recent SEC staff statements regarding proof-of-work mining.
Organizations signing the letter include several prominent crypto firms such as venture capital firm Andreessen Horowitz (a16z), blockchain software company Consensys, and cryptocurrency exchange Kraken.
To date, the SEC has not approved any crypto staking ETFs and on April 14 postponed its decision on allowing Grayscale’s spot Ethereum ETF to include staking functionality.
