“`html
The US Securities and Exchange Commission (SEC) is encountering increasing scrutiny from both present and past officials regarding its changing position on crypto staking services.
On May 29, the SEC’s Division of Corporation Finance released updated guidance on crypto staking services, asserting that some offerings may not be classified as securities, thereby effectively exempting proof-of-stake blockchains from registration obligations under the Securities Act.
Nevertheless, the SEC’s new interpretation might be inconsistent with various federal court rulings, as indicated by former SEC chief of Internet Enforcement, John Reed Stark.
In a post on X, Stark contended that the Commission’s recent action contradicts judicial outcomes in notable cases against crypto exchanges Binance and Coinbase, where judges had previously permitted claims that staking products fell under the definition of securities as per established legal precedent.
“This is how the SEC meets its demise – in plain sight,” Stark remarked in an extensive reply to the agency, deeming the shift “a disgraceful abandonment of its investor safeguarding mission.”
Regarding Binance, although the SEC claimed that the exchange’s staking services represented unregistered securities offerings, the case was ultimately dismissed with prejudice in May 2025, barring the agency from bringing similar allegations. Similarly, in March 2024, a federal judge approved the agency’s case against Coinbase to advance, suggesting that the SEC had “sufficiently alleged” that the staking initiative involved the unregistered offer and sale of securities. This case was also dismissed in February 2025 amid a broader transition in the SEC’s stance on crypto regulation.
Sitting Commissioner Caroline Crenshaw also released a statement on May 29 in reaction to the agency’s stance on crypto staking, cautioning that the staff’s conclusions did not correspond with established case law or the Howey test.
“The staff’s evaluation might reflect what some desire the law to be, but it does not align with court rulings on staking and the enduring Howey precedent upon which they are founded,” Crenshaw noted, adding that:
“This is yet another instance of the SEC’s persistent ‘fake it till we make it’ strategy regarding crypto — taking action based on expectations of future modifications while disregarding existing law.”
The commission has recently implemented a series of deregulatory measures regarding digital assets, including closing inquiries, dropping legal actions, and launching discussions to engage with industry stakeholders on regulation.
“This crypto-deregulatory blitzkrieg,” Stark commented, “has obliterated a once-esteemed 90-year legacy.”
Related: SEC’s Crenshaw criticizes Ripple settlement, warns of ‘regulatory void’
While the SEC has framed its recent actions as efforts to provide regulatory clarity, critics argue that this has resulted in greater ambiguity.
In a statement on June 2, Crenshaw challenged the consistency of the commission’s approach, highlighting instances where the agency seemed to categorize certain digital assets, such as Ether (ETH) and Solana (SOL) tokens, as securities.
“How is it that these crypto assets are unlikely to be regarded as securities regarding registration requirements, yet conveniently become securities when a registrant identifies an opportunity to market a new product?,” Crenshaw questioned.
Speaking at the Bitcoin 2025 conference in Las Vegas, Nevada, Commissioner Hester Peirce responded to criticism of the agency’s new perspective on crypto, pointing out that the classification of a securities transaction relies more on the nature of the agreement than the asset itself:
“Most crypto assets, as we perceive them today, are likely not in themselves securities. That doesn’t imply that you can’t sell a token that is not itself a security within a transaction that is considered a securities transaction. That is where we genuinely need to offer some guidance.”
Magazine: Deposit risk: What do crypto exchanges really do with your money?
Source link
“`
