SEC Says Crypto Staking Not Subject to Securities Laws
The post SEC Says Crypto Staking Not Subject to Securities Laws appeared on BitcoinEthereumNews.com. In brief The SEC has clarified staking rules, excluding self-staking and custodial staking. Its corporate finance division emphasized the importance of retaining ownership of assets. Commissioner Caroline Crenshaw criticized the SEC guidance, calling the agency’s approach a “‘fake it ’till we make it'” outcome. The SEC issued new guidance on crypto staking, confirming Thursday that most of the common staking activities aren’t subject to federal securities regulations, as long as specific conditions are met. Protocol staking involves locking crypto assets that are “intrinsically linked to the programmatic functioning of a public, permissionless network,” the regulator wrote in its latest guidance on Thursday. The same crypto assets could also be used “to participate in and/or earned for participating in such network’s consensus mechanism,” it added. Consensus mechanisms are rules that help participants agree on the network’s state and verify transactions. Staking on specific protocols does “not involve the offer and sale of securities” as defined under the Securities Act of 1933. The non-security status and definition of “Protocol Staking Activities” also extend to the Securities Exchange Act of 1934. The guidance effectively ends uncertainty following a tumultuous period under former SEC Chair Gary Gensler during the Biden era, who previously labeled most crypto as securities. “The SEC’s decision-making process is more open and transparent than most regulators, which is a real strength of the U.S. system,” Michael Bacina, an executive in residence from the global policy think tank Global Digital Finance, told Decrypt. “Given securities laws are designed to protect people from situations where others can mismanage (or steal) their assets, it’s hard to see the policy reasons why non-custodial staking services should be pulled into a regulatory net,” he added. Under federal laws, a security is any financial instrument, like stocks, bonds, investment contracts, and derivatives, through which people invest money…
The post SEC Says Crypto Staking Not Subject to Securities Laws appeared on BitcoinEthereumNews.com.
In brief The SEC has clarified staking rules, excluding self-staking and custodial staking. Its corporate finance division emphasized the importance of retaining ownership of assets. Commissioner Caroline Crenshaw criticized the SEC guidance, calling the agency’s approach a “‘fake it ’till we make it'” outcome. The SEC issued new guidance on crypto staking, confirming Thursday that most of the common staking activities aren’t subject to federal securities regulations, as long as specific conditions are met. Protocol staking involves locking crypto assets that are “intrinsically linked to the programmatic functioning of a public, permissionless network,” the regulator wrote in its latest guidance on Thursday. The same crypto assets could also be used “to participate in and/or earned for participating in such network’s consensus mechanism,” it added. Consensus mechanisms are rules that help participants agree on the network’s state and verify transactions. Staking on specific protocols does “not involve the offer and sale of securities” as defined under the Securities Act of 1933. The non-security status and definition of “Protocol Staking Activities” also extend to the Securities Exchange Act of 1934. The guidance effectively ends uncertainty following a tumultuous period under former SEC Chair Gary Gensler during the Biden era, who previously labeled most crypto as securities. “The SEC’s decision-making process is more open and transparent than most regulators, which is a real strength of the U.S. system,” Michael Bacina, an executive in residence from the global policy think tank Global Digital Finance, told Decrypt. “Given securities laws are designed to protect people from situations where others can mismanage (or steal) their assets, it’s hard to see the policy reasons why non-custodial staking services should be pulled into a regulatory net,” he added. Under federal laws, a security is any financial instrument, like stocks, bonds, investment contracts, and derivatives, through which people invest money…
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