A coalition of nearly 30 crypto companies and industry advocacy groups has signed a letter asking the US Securities and Exchange Commission (SEC) to provide clear regulatory guidelines on staking and liquid staking.
The ‘Backbone Of Decentralized Internet’
On Wednesday, the Crypto Council for Innovation’s (CCI) Proof of Stake Alliance (POSA) sent a letter signed by 29 industry giants to the SEC’s Crypto Task Force, led by Commissioner Hester Peirce, to “secure US leadership in staking.”
The 15-page letter responds to Peirce’s “There Must Be Some Way Out of Here” February statement, which requested input from the public on various topics the Crypto Task Force was wrestling with when approaching the sector.
CCI's response to Commissioner Peirce's request for input. Source: CCI
Answering the Commissioner’s third and fourth questions requesting comments on whether the SEC should address the status of staking and liquid staking, CCI stated that “Every serious legislative and regulatory conversation about crypto (including stablecoins) touches staking. So we have to get it right.”
As the CCI explained, the letter argues that the existing securities disclosure regime is ill-suited for staking services, which are fundamentally technical rather than financial. They asserted that staking isn’t a niche but a necessary technical function, an “essential good” for Proof-of-Stake (PoS) networks.
As “the backbone of the decentralized internet,” staking “secures networks, supports decentralization, and empowers builders to create the next generation of applications on PoS blockchains.”
The core legal argument states that staking, whether direct or via a service, does not meet the legal definition of an “investment contract” under the Howey test, as there is no investment of money, no expectation of profit from others’ efforts, and liquid staking tokens are not securities.
Additionally, it notes that staking providers, unlike traditional businesses, don’t deliver profits through managerial decisions, and that reward rates are “largely uniform across providers, reinforcing the idea that staking is a service, not an investment scheme.”
Key Crypto Players Seeking Regulatory Clarity
The industry coalition includes key high-profile players like Kraken, Andreessen Horowitz’s (a16z) crypto arm, Consensys, Paradigm, and the Blockchain Association. They acknowledged the SEC’s regulatory shift under the Trump administration, adding that the crypto industry is stepping up “with new principles to include in guidelines.”
According to the letter, the industry seeks clear, principles-based guidance for staking and staking services, like the SEC’s recent statement on Proof-of-Work (PoW) mining, to protect users while enabling the growth of the staking industry.
As such, the crypto coalition considers that the SEC “has a chance to recognize staking service providers for what they actually offer: technology services, not financial services,” and ensure that the US remains competitive in the ever-evolving industry.
By providing clear, principles-based guidance, the SEC would ensure that the U.S. remains competitive in the rapidly growing digital asset market. International regulators — including in Canada, the U.K., and Hong Kong — have already provided preliminary clarity on staking, positioning their jurisdictions as more innovation-friendly than the U.S. The SEC risks falling behind unless it provides similar certainty.
It’s worth noting that Coinbase’s CPO, Faryar Shirzad, has also responded to Commissioner Peirce’s request for input. In a March letter, he stated that the regulatory agency should focus on developing clear guidelines that “recognize the economic reality of blockchain technology and the opportunity that exists to unlock the untapped potential of tokenized securities.”
Shirzad also argued that addressing the core issues, including clear definitions, will enable the SEC, other federal agencies, and Congress to tackle further questions “vital to our industry’s future in the US.”
Total crypto market capitalization is at $2.98 trillion in the one-week chart. Source: TOTAL on TradingView
