SEC Clarifies New Rules For Staked Ethereum

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.