The Crypto Council for Innovation has written to the SEC, asking for clarity that crypto staking is not an investment activity. They advocate for principles-based guidance on staking services, emphasising user protections and transparency. Recent shifts in SEC leadership have prompted a more open dialogue with the crypto industry, pushing for clearer regulations amidst concerns about previous enforcement-heavy approaches.
The Crypto Council for Innovation is urging the U.S. Securities and Exchange Commission (SEC) to clarify its stance on crypto staking, asserting that it should not be classified as an investment activity. In an open letter addressed to the SEC’s Crypto Task Force, the council, alongside the Proof of Stake Alliance (POSA), made the case that staking serves to bolster blockchain networks rather than function as an investment scheme.
Staking involves users locking up their tokens in a proof-of-stake (PoS) blockchain to validate transactions and secure the network, earning rewards in return. Supported by key players like Consensys, Kraken, Ava Labs, and Galaxy, this coalition advocates for regulations that foster innovation rather than stifle it. They’ve called for a public statement from the SEC, outlining their position on staking, to create regulatory certainty.
The Crypto Council’s request was straightforward: they seek principles-based guidance for staking services akin to the SEC’s recent remarks regarding proof-of-work mining. The aim is to protect users while also allowing the staking industry to expand, which the council describes as critical for the functioning of PoS networks.
This push for clarity comes at a time when the SEC, under its new leadership with Paul Atkins, seems to be pivoting towards a more accommodating approach to the crypto sector. Previous chair Gary Gensler had been heavily critiqued for what many perceived as aggressive regulatory actions imposed on crypto firms. Recently, under Atkins, the SEC has seemingly eased its stance, stepping back from several high-profile cases against crypto businesses.
In addition, the agency has taken steps to engage with industry stakeholders through a series of roundtables aimed at gathering insights on regulatory needs. In their letter, the Crypto Council has also proposed a robust framework for staking service providers. This includes mandates for user disclosures, transparency regarding reward distribution, and assurances that users retain control over their staked assets. Such measures, they argue, could solidify trust in the sector.
