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The US Securities and Exchange Commission (SEC) has engaged in conversations with Everstake, a prominent non-custodial staking provider worldwide, to investigate more precise regulatory definitions regarding staking in blockchain networks.
This gathering, which also included the SEC’s Crypto Task Force, occurs during a period where more than $193 billion in digital assets are staked on major proof-of-stake (PoS) networks.
Despite the significant level of involvement, staking remains in a legal ambiguity in the US as regulators struggle with its categorization under current securities laws.
The prior SEC administration also took regulatory actions against substantial entities like Kraken, Coinbase, and Consensys due to their staking offerings. The agency, under pro-crypto President Donald Trump, has recently dismissed these regulatory measures.
Throughout the meeting, Everstake informed the SEC that non-custodial staking should not be recognized as a securities transaction. The firm asserted that users retain complete control over their digital assets during the staking process and do not shift ownership to an external entity.
They contended that this aspect makes staking a technical operation, rather than an investment instrument.
“Our primary claim is that staking is neither a financial tool nor a securities transaction, but instead a technical procedure, a foundational protocol mechanism—similar to an oracle in a database—that upholds the integrity and functionality of decentralized networks,” Everstake founder Sergii Vasylchuk stated to Cointelegraph.
Related: SEC postpones staking decision for Grayscale ETH ETFs
Everstake advocates for regulatory clarity
In a letter submitted to the SEC’s Crypto Task Force on April 8, 2025, Everstake requested that the agency provide regulatory clarity for non-custodial staking, as well as custodial and liquid staking frameworks.
In this letter, which was a response to Commissioner Hester Peirce’s appeal for feedback on regulatory handling of blockchain services, Everstake insisted that non-custodial staking should not be viewed as a securities offering.
It argued that non-custodial staking, wherein users keep control of their tokens, does not entail the pooling of assets or an expectation of profits stemming from managerial initiatives.
According to Everstake’s model, users merely delegate validation rights while preserving ownership of their digital assets. Staking rewards are algorithmically allocated by the blockchain network itself, and the firm only supplies technical infrastructure.
Related: Ethereum ETF staking will have minimal impact without prolonged rally: Analyst
Non-custodial staking does not meet Howey test criteria
The letter further elaborates why non-custodial staking does not satisfy each aspect of the Howey test. Users do not invest money in a common venture, do not anticipate profits from Everstake’s endeavors, and are not reliant on the company’s management for financial returns.
Instead, rewards derive from network-level incentives and fluctuate with the market value of the underlying asset.
Everstake proposed explicit criteria that should exempt non-custodial staking from securities classification. These include user asset control, lack of pooled funds, permissionless unstaking, and the offering of purely technical services.
It compares non-custodial staking to proof-of-work mining, which the SEC has previously deemed outside the scope of a securities transaction.
Margaret Rosenfeld, Everstake’s chief legal officer, also stated to Cointelegraph that “with non-custodial staking, there is no transfer of assets, no investment contract, and no third-party risk.” She continued:
“Classifying it as a securities offering undermines the decentralized model and risks stifling innovation in the blockchain domain.”
Nonetheless, the SEC has yet to provide a definitive position. Rosenfeld mentioned that the agency has not made any “specific commitments” related to staking guidance. Nevertheless, it remains open to input from industry participants.
“The Task Force is actively engaging with various stakeholders—including those involved with non-custodial staking, ETFs, and broader blockchain infrastructure—to gather insights.”
In an April 30 letter to the SEC, nearly 30 crypto advocacy groups led by the lobbying organization the Crypto Council for Innovation (CCI) requested the agency for clear regulatory guidance regarding crypto staking and staking services.
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