The Crypto Council for Innovation (CCI), and more than 30 major crypto firms including a16z, Paradigm, and Kraken, has urged the US Securities and Exchange Commission (SEC) to clarify that crypto staking is a technical process, not a securities transaction.
Crypto Industry to SEC: Staking is a Technology
In a letter submitted to SEC Commissioner Hester Peirce, the coalition argued that staking is necessary for blockchain security and decentralization, and should not be regulated like traditional financial investments. The letter responds to Commissioner Peirce’s recent summon for public feedback on how staking and liquid staking should be treated under securities laws.
“Staking is not an investment scheme,” CCI wrote. “It’s a technical function, similar to how proof-of-work mining operates.” The letter stresses that staking does not meet the legal standards of an “investment contract” under the Howey Test — a key framework the SEC uses to determine whether something is a security.
Key legal points included in the letter are:
- Stakers keep full ownership of their assets and can withdraw anytime.
- Rewards are generated by blockchain protocols, not by the actions of staking providers.
- Liquid staking tokens are like digital receipts, not speculative investments.
The group also said that the current securities laws are poorly suited to regulate staking and could deter innovation if applied too broadly. Instead of this, the industry has proposed principles-based guidance focusing on:
- Transparent fee and risk warnings,
- Public smart contract audits,
- Transparent user consent policies, and
- Accurate, non-promotional language.
Crypto Council for Innovation (CCI) Letter Signed by 30 companies
The letter also references the Staking Industry Principles developed by the Proof of Stake Alliance (POSA), calling for user protection without compromising innovation.
The industry’s message is clear: overregulation of staking could harm US leadership in blockchain technology. Other countries — including Canada, the UK, and Hong Kong — have already issued clearer rules, giving them a head start in staking-friendly environments.
“Give us clarity and users will be protected. Innovation will flourish,” CCI said in a post on X.
Also Read: Grayscale Urges SEC to Approve Ethereum ETF Staking, Citing $61M in Lost Revenue
