LAST MINUTE: After the Dismissal of the Binance Case, SEC Announced Another Good News for the Cryptocurrency Market!

The Corporate Finance Division of the SEC, (SEC), has issued a new statement regarding staking activities on Proof-of-Stake (PoS) based networks to provide further clarity on the relationship between cryptoassets and federal securities laws.

The statement announced that certain types of staking transactions do not need to be registered with the SEC.

In a statement released by the Corporate Finance Department, it was stated that staking activities conducted on open and permissionless networks, defined as "Protocol Staking" and utilizing the PoS consensus mechanism, are not considered as "securities offerings" under federal securities laws. Therefore, it was indicated that there is no registration obligation with the SEC for the aforementioned transactions.

In PoS networks, users can assume the role of "Node Operator" ( by staking cryptoassets that are defined as "Covered Crypto Assets" and integrated into the technical operation of the network. These operators are selected as "Validator" ) either randomly or based on specific criteria according to certain protocol rules. In this process, validators receive both newly minted cryptocurrencies and a share of the transaction fees in return for validating new blocks.

The SEC's statement detailed three different staking methods:

• Individual staking: Users perform direct staking by running their own nodes, and the ownership of assets along with the private keys remains completely under the user's control.
• Direct self-custodial staking with a third party: Users authorize a third node operator for validation processes while retaining ownership of their assets and holding their private keys.
• Custodian staking: Assets are entrusted to a wallet controlled by a third party called "Custodian". The custodian uses these assets for staking operations, but the ownership of the assets remains with the user, and these assets are not used for lending, speculation, or other purposes.

*This is not investment advice.

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