New guidance from US Securities and Exchange Commission (SEC) staff says the tokens people get for staking ether are not securities, as long as they work purely as receipts.
The agency’s Division of Corporation Finance published the guidance on Friday. Three years ago, the same agency made a crypto exchange pay $30 million over staking.
What SEC Staff Said About Staked ETH
Staking means locking up coins to help run a blockchain, in return for rewards. Liquid staking services give users a tradable token as proof of the coins they locked up.
Securities come with registration and disclosure rules. The Howey test, a 1946 Supreme Court standard, asks whether buyers expect to profit from other people’s work.
According to the FAQs, a staking receipt token is a “digital tool” when the coin behind it is a digital commodity. In a March 17 interpretation, the SEC and the Commodity Futures Trading Commission (CFTC) named 16 digital commodities. Ether (ETH), trading near $2,685, was one of them.
How Staking Went From SEC Target to Staff Approval
In February 2023, Kraken paid $30 million and shut down its US staking service to settle SEC charges. The agency said Kraken advertised yearly returns as high as 21%.
“Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws,” Gary Gensler, then the SEC chair, issued a warning.
Four months later, the SEC sued Coinbase and called its staking program an unregistered securities offering. The agency dropped that case in February 2025.
Staff statements in May and August 2025 then said that protocol staking and liquid staking do not involve securities offerings.
The One Condition Is That the Token Stays a Receipt
The catch is in how staff define a receipt. The token cannot change the rights attached to the staked ETH or add extra rewards.
The provider also cannot lend, pledge, or reuse the deposited coins. The token also does not set or fix the rewards. That is the difference from Kraken, which advertised its own return figures.
Not everyone at the SEC agreed with this approach. Commissioner Caroline Crenshaw said the August 2025 liquid staking statement relied on assumptions that may not match how real programs work. She titled her response “Caveat Liquid Staker.”
The same FAQs also covered token buybacks, where a project spends its own money buying its tokens back from the market. On a network that already works, announcing a buyback does not count as a promise that could turn the token into a security. On an unfinished network, however, pitching a buyback as a way to earn returns could still count.
The FAQs themselves say they carry no legal force. That weighs more now that the Clarity Act, a bill to split crypto oversight between the SEC and the CFTC, has failed in the Senate this month.
In March, BeInCrypto reported that analysts said regulators had already delivered most of the bill’s promises. The same analysis pointed out the weak spot. Unlike a law, guidance can be withdrawn by a future administration.
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