Almost 30 advocacy groups supporting cryptocurrency, led by the Crypto Regulation Council for Innovation (CCI), are working together to urge the U.S. Much-needed clarification on the regulations about bitcoin staking will be issued by the United States Securities and Exchange Commission (SEC). Filed on April 29, 2025, the letter raises concerns that existing SEC practices leave uncertainty about whether staking services are securities, which could jeopardize innovation in the rapidly growing industry.
Why is the Industry Demanding Clarity?
It is not just legal certainty they’re after, there’s also an effort to preserve the broader economic potential of blockchain. Protectionist groups argue that taxing stakeholders would devastate U.S. leadership in constructing and preserving the next generation of financial infrastructure.
POSA’s announcement stressed that staking, as is also the case for mining in proof-of-work frameworks, supports network operation and does not act as a passive investment vehicle. The groups cautioned that applying it as a securities rule could burden protocols and service providers with undue expense. This harmonizes with insights from our staking guide, in which staking is described as the functional core of PoS networks such as Ethereum and Solana.
The timeliness of this appeal mirrors the frustration of the industry with SEC crypto regulation, specifically its enforcement-first approach without explicit policy rules. The fear is that staking services provided by exchanges such as Coinbase, Kraken, and decentralized protocols may be subject to penalties for inadvertently breaking rules that have not been explicitly defined.
Likely Impact on the U.S. Crypto Regulation
The consequences of ambiguous staking regulation are staggering. Without clear legal direction, businesses providing staking services face the threat of litigation. This regulatory uncertainty is already having a chilling effect on innovation, pushing projects and capital abroad.
Kraken consented to discontinue its U.S. staking services and settle with the SEC for $30 million in February 2023, despite strong resistance from the community. Such events have put other U.S.-based projects on their toes, further accelerating the industry’s demand for clarity.
While crypto regulation USA is in limbo, nations such as Switzerland, Singapore, and the UAE are pushing ahead with crypto-friendly regulations. Groups promoting the cause suggest that unless the U.S. acts resolutely, it could lose its status as a fintech and blockchain innovation center. This was reflected recently in an article by the Wall Street Journal, in which SEC Commissioner Hester Peirce called for greater transparent rule-making for digital assets.
Within the Letter to the SEC
The 14-page letter submitted to the SEC explains the economic justification for staking and includes legal research supporting the company’s claim that, according to the criteria used by the Howey Test, staking is not a security. Rather, the groups propose a customized framework that takes into account the technical character and economic purpose of staking.
It’s not simply legal clarity they’re seeking, there’s also a push to protect the larger economic potential of blockchain. Taxing staking, according to protectionist groups, might make it impossible for the United States to take the lead in creating and sustaining the financial infrastructure of the future.
A Broader Push for Balanced Regulation
Calls for more reasonable SEC crypto regulation aren’t new. Commissioner Hester Peirce, often dubbed “Crypto Mom” for her supportive stance, has long criticized the agency’s reliance on enforcement over education and open policy development. She has emphasized that creating regulatory clarity is essential for supporting both consumer protection and innovation.
Industry insiders are optimistic that such letters as this one will initiate a discussion instead of spawning yet another enforcement action. As our regulatory analysis lays out, forward-thinking policymaking, not backward-facing litigation, is the way ahead if the U.S. is to lead instead of lag in the adoption of blockchain.
What Comes Next?
The SEC now has the ball. If the agency gets involved positively, it might represent a turning point in U.S. crypto regulation, especially as it concerns rules on crypto staking. Alternatively, further silence or enforcement with no guidance may drive developers and platforms offshore completely.
For the time being, the crypto world holds its breath waiting anxiously to observe whether its collective voice will translate into tangible strides towards determining Crypto Regulation USA’s future.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
My work centers on understanding how blockchain, AI, and digital identity are reshaping global industries. At Spearmint, I help lead the direction of initiatives that bring clarity, structure, and meaningful user experiences to complex technological environments. I focus on bridging vision with execution, ensuring that innovation remains practical, scalable, and aligned with long-term growth.
As an author at Coinography, I create insights that translate fast-moving Web3 developments into clear, useful narratives. I explore topics such as decentralized governance, digital identity, creator economies, token models, protocol design, and the shifting cultural patterns around emerging technology. My aim is to make digital transformation more understandable and approachable for a wider audience.
I believe that Web3 is not only a technological shift but a cultural and creative one. Strong ideas, thoughtful communication, and human-centered design will shape which technologies thrive and how communities evolve around them. My writing and research reflect this belief, focusing on clarity, relevance, and long-term perspective.
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