{"id":129447,"date":"2025-05-17T10:20:33","date_gmt":"2025-05-17T10:20:33","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=129447"},"modified":"2025-05-17T10:20:33","modified_gmt":"2025-05-17T10:20:33","slug":"everstake-defends-non-custodial-staking-as-sec-weighs-industry-input","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=129447","title":{"rendered":"Everstake defends non-custodial staking as SEC weighs industry input"},"content":{"rendered":"

Source: Cointelegraph.com NewsThe US Securities and Exchange Commission (SEC) has held discussions with Everstake, one of the largest non-custodial staking providers globally, to explore clearer regulatory definitions around staking in blockchain networks.
\nThe meeting, which also involved the SEC\u2019s Crypto Task Force, comes at a time when over $193 billion in digital assets are staked across major proof-of-stake (PoS) networks.
\nHowever, despite the massive scale of participation, staking remains in a legal gray zone in the US as regulators wrestle with its classification under existing securities law.
\nThe previous SEC administration also took enforcement actions against major players such as Kraken, Coinbase, and Consensys due to their staking services. The agency, under pro-crypto President Donald Trump, has recently dismissed these enforcement actions.
\nDuring the meeting, Everstake told the SEC that non-custodial staking should not be classified as a securities transaction. The company said that users maintain full control over their digital assets throughout the staking process and do not transfer ownership to a third party.
\nThey argued that this makes staking a technical function, not an investment product.
\n\u201cOur main assertion is that staking is not a financial instrument or security transaction, but rather a technical process, a base-layer protocol mechanism\u2014akin to an oracle in a database\u2014that maintains the integrity and functionality of decentralized networks,\u201d Everstake founder Sergii Vasylchuk told Cointelegraph.
\nEverstake team meeting with the SEC. Source: EverstakeRelated: SEC delays staking decision for Grayscale ETH ETFs
\nEverstake calls for regulatory clarity
\nIn a letter submitted to the SEC\u2019s Crypto Task Force on April 8, 2025, Everstake asked the agency to extend regulatory clarity to non-custodial staking and custodial and liquid staking models.
\nIn the letter, which came in respond to Commissioner Hester Peirce\u2019s call for input on regulatory treatment of blockchain services, Everstake argued that non-custodial staking should not be considered a securities offering.
\nIt claimed that non-custodial staking, where users retain control of their tokens, does not involve the pooling of assets or the expectation of profits from managerial efforts.
\nIn its model, Everstake said users delegate only validation rights while maintaining ownership of their digital assets. The staking rewards are algorithmically distributed by the blockchain network itself, and the firm merely provides technical infrastructure.
\nRelated:\u00a0Ethereum ETF staking will have little impact without multimonth rally: Analyst
\nNon-custodial staking fails the Howey test
\nThe letter also details why non-custodial staking fails each prong of the Howey test. Users do not make an investment of money in a common enterprise, do not expect profits from Everstake\u2019s efforts, and are not dependent on the company\u2019s management for financial returns.
\nInstead, any rewards come from network-level incentives and fluctuate with the market value of the underlying asset.
\nEverstake proposes specific criteria that should exempt non-custodial staking from securities classification. These include user asset control, absence of pooled funds, permissionless unstaking, and the provision of purely technical services.
\nIt likens non-custodial staking to proof-of-work mining, which the SEC has previously ruled out as a securities transaction.
\nMargaret Rosenfeld, Everstake\u2019s chief legal officer, also told Cointelegraph that \u201cwith non-custodial staking, there\u2019s no handover of assets, no investment contract, and no third-party risk.\u201d She added:
\n\u201cTreating it as a securities offering undermines the decentralized model and risks chilling innovation in the blockchain sector.\u201d
\nNevertheless, the SEC has so far withheld a definitive stance. Rosenfeld said that the agency did not make any \u201cspecific commitments\u201d on staking guidance. However, it continues to listen to industry stakeholders.
\n\u201cThe Task Force is actively engaging with a range of stakeholders\u2014including those involved with non-custodial staking, ETFs, and broader blockchain infrastructure\u2014to gather input.\u201d
\nIn an April 30 letter to the SEC, nearly 30 crypto advocate groups led by the lobby group the Crypto Council for Innovation (CCI) asked the agency for clear regulatory guidance on crypto staking and staking services.
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Source: Cointelegraph.com NewsThe US Securities and Exchange Commission (SEC) has held discussions with Everstake, one of the largest non-custodial staking providers globally, to explore clearer regulatory definitions around staking in… <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/129447"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=129447"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/129447\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=129447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=129447"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=129447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}