Path to Staking: merging POSA Strategy with the drive for SEC Transparency
Laying Down the Law: Unifying Staking Standards
In the ever-expanding crypto world, the Proof-of-Stake Alliance (POSA) is stepping up to establish a unified set of best practices for staking providers across security, transparency, governance, and resilience. Fed up with the fragmented landscape that erodes trust, POSA has distilled essential principles into an actionable guide to bring order and reliability to retail users and big institutions.
Why a United Front Matters
With a shared operational playbook, the staking ecosystem can accelerate growth and minimize risks. Service providers can seamlessly integrate with wallet apps, exchanges, and DeFi protocols using standard APIs and reporting formats. Users enjoy predictable, consistent interfaces for delegating assets and keeping tabs on rewards. Aligned security guidelines mean fewer high-profile hacking incidents, and coordinated incident-response protocols allow services to cooperate during outages or attacks. Institutions can step confidently into staking markets, with clear insight into risk parameters, so they can scale up without the need for custom due diligence for each platform. Ultimately, a set of united practices lowers costs for operators, fostering a more resilient network that entices new capital and participants.
Pitching to the SEC: A Call to Action
Despite staking's explosive growth, regulatory ambiguity has dampened institutional interest. Hence, more than thirty exchanges, infrastructure firms, and wallets united under the Crypto Council for Innovation to petition the SEC. These organization heavyweights are lobbying for clarification that native protocol staking is outside securities jurisdiction. They propose additional guidance on which custodial or managed-staking arrangements necessitate registration as a broker-dealer or investment advisor and differentiating genuine securities offerings from routine network-security services. Drawing parallels to the SEC's stance on proof-of-work mining and memecoins, the coalition urges the SEC to issue definitive rules that protect consumers without stifling innovation.
Staking: The Backbone of Decentralization
Staking lays the groundwork for the security and decentralization of proof-of-stake blockchains. When token holders pledge assets as collateral to validate blocks, they create economic incentives aligned with network health and consensus integrity. Misbehavior triggers hefty penalties, deterring bad actors. The result: a robust, permissionless system of distributed validators that secure transactions and finalize new blocks – a function on par with routing packets in the internet or securing servers in cloud computing.
Recognizing staking as a core infrastructure service allows regulation to focus on consumer protections while preserving the protocol's technical autonomy. This crucial distinction opens the door to exciting new use cases like liquid staking derivatives in DeFi, staking-backed collateral models in lending, and tokenized governance mechanisms across ecosystems.
Regulation and Industry Collaboration: A Two-Pronged Approach
Building a rock-solid staking ecosystem requires progress on twin fronts. First and foremost, industry players must demonstrate adherence to POSA's Playbook through real-life pilots and shared audit disclosures. This includes publishing consistent performance metrics, proof-of-reserve attestations, incident-response reports, and sharing common compliance frameworks and legal analyses with the SEC. This openness fosters trust among market participants and encourages the SEC to offer regulatory guidance that aligns with industry best practices.
On a Roll: The Future of Staking
With a united front and the eagerly-anticipated clarity from the SEC, staking is poised for significant institutional investment, the birth of new DeFi innovations, and the entrenchment of proof-of-stake as the bedrock of a decentralized internet.
Meanwhile, Coinbase continues its battle with the SEC, asking the court to rule cryptocurrency as not a security in a landmark legal fight for the digital asset industry.
Enrichment: The current SEC stance on the coalition's petition, which aims to categorize staking as a network utility activity rather than a securities offering, remains in a phase of ongoing engagement and partial recognition within recent SEC communications. In a memo dated April 30, 2025, the coalition argued that staking and Staking Services do not constitute securities transactions under federal securities laws, aligning with the SEC Division of Corporation Finance’s March 2025 Statement on Proof-of-Work (PoW) Mining Activities. However, the commission is actively seeking further clarification and input on token offerings, including mechanisms like staking rewards and network fee redistribution. Ongoing development of safe harbor mechanisms is being discussed, and the final determination of the SEC's stance remains to be seen. As of May 2025, the SEC's response leans more towards recognition of staking activities' resemblance to non-security administrative network functions akin to PoW mining rather than a clear acceptance of the coalition’s petition. The SEC under its new Cyber and Emerging Technologies Unit continues broader regulatory oversight of digital assets, evolving guidance to balance innovation support with investor protection.
- The Proof-of-Stake Alliance (POSA) aims to establish a unified set of best practices for staking providers across security, transparency, governance, and resilience, addressing the fragmented landscape that's eroding trust.
- A unified set of practices for staking can accelerate growth and minimize risks, as service providers can integrate seamlessly with wallet apps, exchanges, and DeFi protocols.
- Users benefit from predictable, consistent interfaces for delegating assets and keeping tabs on rewards, thanks to aligned security guidelines and coordinated incident-response protocols.
- Institutional confidence in staking markets can increase with clear insight into risk parameters, reducing the need for custom due diligence for each platform.
- A set of united practices lowers costs for operators, fostering a more resilient network that attracts new capital and participants.
- Exchanges, infrastructure firms, and wallets are lobbying the SEC for clarification that native protocol staking is outside securities jurisdiction.
- Staking lays the groundwork for the security and decentralization of proof-of-stake blockchains, creating economic incentives aligned with network health and consensus integrity.
- Recognizing staking as a core infrastructure service allows regulation to focus on consumer protections while preserving the protocol's technical autonomy, opening opportunities for DeFi innovations, liquid staking derivatives, staking-backed collateral models, and tokenized governance mechanisms.
- Industry collaboration and adherence to POSA's Playbook through real-life pilots and shared audit disclosures are essential for fostering trust among market participants and encouraging regulatory guidance that aligns with best practices.
- While the SEC's stance on the coalition's petition, which categorizes staking as a network utility activity rather than a securities offering, remains in a phase of ongoing engagement and partial recognition, the commission is actively seeking further clarification on token offerings and mechanisms like staking rewards and network fee redistribution.
