Opinion by: Margaret Rosenfeld, Chief Legal Officer of Everstake
In the Internet dawn in the late 1990s, technology exceeded regulation-and lawyers, engineers and policy manufacturers had to learn real-time together. Some regulators have seen the Internet as a threat, others as a challenge.
Those who make the most significant differences, however, are those who are willing to engage directly on how technology worked. This type of interaction – technical fluency, non -technophobia – enabled the Internet to emerge from fringe before to familiar infrastructure.
Both are now true for crypto, and the Securities and Exchange Commission’s (SEC) recently statement In staking is an early signing that the agency is beginning to identify the difference between participating in a network and investing in a security.
A point for crypto regulation
The May 2025 guide to the specific protocol staking activities of the protocol was marked for the first time that the SEC recognized that some forms of staking could fall out of the sense of security transactions. In doing so, it offers a long-awaited signal: contributing to the agreed blockchain-especially in a way that is not a custodial or protocol-native-may not require security registration.
This is a pivotal shift. If staking is properly treated as a participation in the infrastructure rather than speculation -awarely investment, it can realize the US in other constituents who have made a more annoying approach.
The main issue is the legal application Howey Test. For many years, critics have argued that staking naturally involves a “investment of money in a common business with hope of income from others’ efforts.” It assumes that all staking resembles centralized yield products-if many proof-of-stake mechanisms operate without caution, pooling or performance commitments. When tokenholders dedicate to validators, they can help to secure the network, not entering a contract for income.
This is not a theoretical difference. Treating protocol staking as a security transaction imposes extensive compliance burdens: registration, disclosure, precautions and anti-fraud obligations designed for traditional financial instruments.
If those policies are applied to the open source of blockchain infrastructure, the result will be a chilling validator activity and pushing a change in the coast. However, a diverse framework that separates non-custodial staking from custodial or pooled models maintains investor protection and protocol decentralization.
Policy development begins with understanding the protocol level
The activities of the more sophisticated regulatory understanding are not just legal theory but technical explanations. The effective dialogue between regulators and industries requires more than submitting legal briefs. It requires walking on validator operations, staking and protocol levels staking mechanics along with engineers, developers and infrastructure operators.
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When regulators interact with lawyers and systems of systems, the policy is rooted in real-world understanding. The latest language of the SEC reflects that kind of knowledge, collaboration.
The statement does not eliminate the risk of implementation, especially for platforms to blend in guarantee of liquidity or income assurance. This indicates that the agency is willing to look at technical facts.
The impact of that shift market is significant. It gives us developers and validators a stronger legal walk and sends a signal to institutional participants that there is a room for the following infrastructure development.
Commissioner Hester Peirce has long urged the SEC to review blockchain services based on their actual design rather than superficial financial resemblance to heritage. According to that perspective, the new agency’s guide is explicitly recognized that not all staking models involve a “advocate,” a “give” or a promise of income. This change will allow developers to develop systems that support network security without the fear of restoring security laws if appropriately implemented.
Doubts argue that whatever token -based reward mechanism is, according to nature, a return to finance. This flats the difference -the blockchain protocols are different. Often, staking rewards are emissions defined by the protocol tied to network participation-non-decision-making payments from a centralized creature. Delegators maintain control over their property, and validators conduct a technical service rather than a financial. Economic design is closer to system maintenance than equity investment.
It’s not just semantics – this is the foundation of how decentralized infrastructure works. Applying a size-all-all security laws to such systems is a risk of distorting incentives, overly regulating developers and leaving the US in global competition for blockchain talent.
That is why it is so important that the SEC appears willing to be willing to engage Dialogue – Not just dictating the outcomes.
Developing a smarter policy by collaboration
Better regulation does not always mean creating completely new laws. This means interpreting existing frameworks with a full understanding of the underlying technology. This includes recognizing whether some activities-such as non-staking preservation-does not meet the threshold of a security transaction, even though they resemble financial activity at a surface level.
The SEC statement is not a safe harbor of blankets. However, the signal that contact with particular technology occurs and that the SEC may be prepared to continue the diversity between infrastructure and investment. That’s not just good policy – this is how change is rooted.
As the Internet season, crypto will change from pendant to border to familiar – but if regulators spend time to understand how blockchain systems work. SEC transfer to staking shows that the type of understanding is possible. More development will follow if the industry continues to meet table policy manufacturers-not just legal arguments, but in real-world education.
Opinion by: Margaret Rosenfeld, chief legal officer of everstake.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
