Nearly three dozen crypto groups have written to the U.S. Securities and Exchange Commission (SEC) calling for clarity on crypto staking. They argue that the process is not an investment activity in the traditional sense, but rather a technical process based on blockchain protocols.
CCI Proof of Stake Alliance (POSA) Position
The CCI Proof of Stake Alliance believes that staking is the foundation of a decentralized internet. In a letter to SEC Commissioner Esther Peirce, the alliance argues that staking does not meet the requirements of securities.
The coalition calls on the SEC to support the responsible inclusion of staking features in exchange-traded products (ETPs) and avoid overly prescriptive rules that could stifle innovation.
Technical Aspects of Staking
According to the coalition’s arguments, staking does not meet the definition of an “investment contract” under Howey. The rewards received by staking participants are determined by the protocols of the blockchain, not by the efforts of the staking provider.
A Request for Guidance
The group is asking the SEC to issue guidance similar to the statements on the validation of mining. It is noted that there has been more progress and constructive dialogue with the regulator over the past four months.
Support from Well-Known Crypto Organizations
The Proof of Stake alliance includes well-known crypto organizations such as Andreessen Horowitz, Consensys, and Kraken. Their support underscores the importance of the issue for the entire crypto community.
Current Developments and Expectations
The SEC has yet to approve the creation of an exchange-traded fund (ETF) for cryptocurrencies. Bloomberg ETF analyst James Seyffarth predicted the launch of an Ethereum ETF with staking in May.
This call to the SEC reflects the crypto community’s desire for clearer regulation and support for innovation in this area.
