Fresh guidance issued by staff at the US Securities and Exchange Commission (SEC) indicates that tokens received for staking ether do not qualify as securities, provided they function strictly as receipts.
The release came from the agency’s Division of Corporation Finance on Friday. This development arrives three years after the same regulatory body penalized a cryptocurrency exchange $30 million regarding staking activities.
What SEC Staff Said About Staked ETH
Staking involves locking digital coins into place to support blockchain operations, generating rewards in return. Meanwhile, liquid staking providers supply users with tradable tokens serving as proof of the deposited coins.
Securities are subject to specific disclosure and registration mandates. Dating back to 1946, the Howey test serves as a Supreme Court standard to determine whether purchasers anticipate profits generated by the efforts of others.
As outlined in the FAQs, a staking receipt token functions as a “digital tool” whenever the underlying coin is categorized as a digital commodity. A joint interpretation on March 17 by the SEC and the Commodity Futures Trading Commission (CFTC) identified 16 digital commodities, which included Ether (ETH) trading near $2,685.
How Staking Went From SEC Target to Staff Approval
Kraken agreed to a $30 million penalty in February 2023 and halted its US staking operations to resolve SEC enforcement actions, with the agency pointing out that Kraken promoted annual returns reaching up to 21%.
“Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws,” Gary Gensler, then the SEC chair, issued a warning.
Four months afterward, the SEC filed a lawsuit against Coinbase, characterizing its staking platform as an unregistered securities offering—a case the agency ultimately dismissed in February 2025.
Subsequent staff positions issued in May and August 2025 clarified that protocol and liquid staking activities do not constitute securities offerings.
The One Condition Is That the Token Stays a Receipt
The crucial stipulation lies in the staff’s definition of a receipt. Such tokens cannot alter the inherent rights of the staked ETH nor generate additional rewards.
Additionally, providers are prohibited from lending, pledging, or reusing the deposited coins, and the receipt token cannot establish or guarantee reward amounts—distinguishing these offerings from Kraken’s practice of promoting specific return rates.
This stance did not receive unanimous backing within the SEC. Commissioner Caroline Crenshaw expressed concern that the August 2025 liquid staking statement relied on assumptions potentially disconnected from practical operations, publishing her response under the title “Caveat Liquid Staker.”
The same set of FAQs addressed token buybacks, where projects utilize their own capital to purchase tokens from the market. For an operational network, announcing a buyback is not viewed as a promise that transforms a token into a security. Conversely, promoting a buyback as a return-generating mechanism on an unfinished network could still trigger security classifications.
The FAQs explicitly note that they hold no binding legal authority. This limitation carries greater significance now that the Clarity Act—legislative proposals aimed at dividing cryptocurrency oversight between the SEC and the CFTC—failed to pass the Senate this month.
BeInCrypto reported in March that analysts viewed regulators as having already fulfilled many objectives proposed by the bill, while highlighting a persistent vulnerability: unlike statutory legislation, administrative guidance can be reversed by a subsequent administration.