The Crypto Council for Innovation (CCI) has joined forces with several crypto companies to urge the US Securities and Exchange Commission (SEC) to provide details regarding the regulatory status of staking. The letter emphasizes that staking should not be considered a security but rather recognized as a technical function that ensures the security of blockchain networks.
This is reported by Finway
Crypto Industry Demands
Companies believe that regulating staking as an investment contract could threaten not only the security of networks but also the US’s position on the international stage in the Web3 sector. In an open letter addressed to SEC Commissioner Hester Peirce, it is noted that staking does not meet the legal definition of an “investment contract” under the Howey test.
“We see a rare unification of the industry around a common goal — to ensure clear rules for the rapidly evolving innovation sector,” CCI stated.
Regulatory Proposals
CCI and other market participants are calling on the SEC to provide principle-based guidance similar to that already issued for mining on the Proof-of-Work algorithm. This could:
- protect users;
- maintain transparency;
- not stifle innovation.
Among the key principles proposed by the industry:
- staking services should clearly describe their offerings and not promise “guaranteed profits”;
- users should always retain control over staked assets;
- providers should be transparent about risks, fees, and unstaking conditions;
- smart contracts should be available for public audit.
The letter also emphasizes that regulating staking as a security is legally flawed and poses threats to network security and the US’s position in the global cryptocurrency market. Support for the petition has been expressed by organizations such as a16z crypto, Consensys, Kraken, Galaxy, Ava Labs, Lido Finance, Figment, Near Foundation, as well as representatives from the Ethereum, Solana, and other network ecosystems.
It is worth noting that recently, the Nasdaq stock exchange proposed that the SEC establish standards for crypto assets similar to those in the traditional market, including developing a clear classification.