SEC SAYS STAKING ACTIVITIES ARE NOT SECURITIES TRANSACTIONS

Summary from the TLDR Crypto newsletter

The SEC clarified in a May 29 staff letter that protocol staking on PoS blockchains does not constitute a securities transaction, clearing regulatory uncertainty that had deterred participation and undermined blockchain decentralization. This enables banks, fintechs, and custodians to offer staking services without triggering securities laws, likely accelerating institutional staking, DeFi innovation, and staking-based ETFs. However, the SEC emphasized that liquid staking and rehypothecation of staked assets remain ineligible for ETFs, and custodians must keep staked assets isolated from business operations or third-party claims.