On May 29, 2025, the SEC’s Division of Corporation Finance quietly released something the industry has been waiting on for years: actual guidance on how certain protocol-staking activities fit - or don’t fit - into U.S. securities laws. While it doesn’t change the law or offer blanket safe harbor, it’s the clearest statement we’ve seen from the SEC acknowledging that not all staking is a securities offering—and that’s a big deal.

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What the SEC Said

At a high level, the SEC’s guidance draws a firm line between staking directly with a blockchain protocol and staking-as-a-service models that introduce third-party custody, pooling, or promotional mechanics.

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According to the statement, when a user stakes their tokens directly to a proof-of-stake (PoS) network and retains full control over their assets, and when rewards are determined solely by the protocol’s rules, not by any third-party effort or discretion, those activities are unlikely to  trigger federal securities laws.

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That may sound obvious to those in the space, but coming from the SEC, it’s a significant step forward.

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Why It Matters

This is the first time the SEC has publicly and directly acknowledged that protocol-level staking, when done properly, doesn’t automatically amount to an investment contract. It marks a shift from the enforcement-first posture seen in recent years and gives staking providers, validators, and infrastructure projects something to point to when designing and assessing their offerings.

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It also helps reinforce that not all “staking” is the same. The term has been broadly applied across everything from true protocol delegation to yield-bearing investment products with very little in common. This guidance starts to untangle that.

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Key Takeaways

• User control is critical: If the user maintains control of their tokens and delegates directly to a protocol or validator, the activity is far less likely to raise securities issues.
• Protocol-defined rewards are acceptable: As long as returns are set by the protocol and not managed, promised, or enhanced by a provider, they’re generally outside the scope of the Howey test.
• Avoid profit promises: Marketing staking services with language like “managed yield,” “enhanced returns,” or “earn more” introduces real risk.
• No discretion over rewards: If a service provider adjusts, batches, or redistributes rewards, even if well-intentioned, it may raise securities questions.
• Slashing protection and aggregation are allowed: The SEC acknowledged that ancillary services like slashing coverage or helping users meet minimum staking thresholds don’t by themselves transform the offering into a security, so long as they’re structured correctly.
  
  

What's Next

This isn’t a free pass, and it’s not official rulemaking. But it is an incredibly helpful signal. It gives staking providers and infrastructure players clearer guardrails for building compliant offerings and reaffirms that staking, when done right, is a core blockchain function, not an investment scheme.

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Expect to see further clarification and possibly a ripple effect on how staking disclosures and platform designs are approached in the U.S. And while we still need formal rulemaking or legislation, this guidance gives teams across the space more confidence to move forward.

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For those of us who’ve been navigating years of ambiguity, that’s a welcome change.

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Michael Bassett serves as Head of Legal and Compliance at Blockdaemon, where he leads the company’s global legal, regulatory, and compliance initiatives. With over a decade of experience in the legal field, Michael brings deep expertise in blockchain infrastructure and emerging technologies.

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He began his career in Big Law, where he advised startups and emerging growth companies on corporate, transactional, and regulatory issues. Prior to joining Blockdaemon, Michael was General Counsel at Horizen Labs, where he shaped legal strategy across protocol development, DAO governance, token issuance, and international compliance. He also co-founded the web3 startup Yord, serving as its General Counsel.

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‍Michael holds a J.D. from Drexel University and a B.A. from the University of Delaware