The momentum around staking regulation hasn’t slowed since our May 29 post. If anything, it’s accelerated. On June 5th, Figment’s Director of Regulatory and Legal Affairs Eme Housser and Head of Americas Josh Deems will be speaking directly with policymakers, which is timely given the significant developments that have unfolded in just the past few days.
Commissioner Reactions: Support and Productive Challenge
Commissioner Hester Peirce wasted no time endorsing the SEC’s Division of Corporation Finance’s May 29 statement. Her follow-up was unambiguous: “Today, the Division of Corporation Finance clarified its view that certain proof-of-stake blockchain protocol ‘staking’ activities are not securities transactions within the scope of the federal securities laws.”
This represents the definitive regulatory backing the industry has been seeking.
Commissioner Caroline Crenshaw took a different but constructive approach, challenging the statement and asking for more specificity around the May 29 guidance. Her response builds off the substantial progress of the Division of Corporation Finance statement and Commissioner Peirce’s response and continues to drive toward the specifics we agree are necessary.
Of particular importance to us at Figment, as we differentiate ourselves based on the fact that all our staking offerings are non-custodial, Commissioner Crenshaw calls for the SEC to provide analyses of various staking programs with an explanation as to why some may or may not constitute managerial efforts. Such analysis, coupled with the call for clarity on requirements for crypto custodians, would, we believe, show unequivocally that non-custodial staking is the least risky.
We would also welcome further clarification regarding the ancillary services referenced in the original SEC statement, specifically the assertion that aggregating assets, providing coverage for slashing or missed rewards, and distributing rewards on a custom schedule do not constitute the offering of a security. Each of these services involves important nuances and can be done in differing ways. For example, the concept of aggregating assets may refer to a custodial validator arrangement or a delegated proof of stake model, such as that used by Solana.
A New Market Structure Bill Released
On the same day as the SEC’s staking statement, Congressman French Hill advanced the Digital Asset Clarity Act (the long-awaited Market Structure Bill) as proposed legislation. This timing wasn’t coincidental and signals coordinated movement across both regulatory and legislative channels.
For staking, this could matter considerably. With the Clarity Act, lawmakers have an opportunity to codify into law that staking transactions and staking services are not securities transactions, moving us from regulatory guidance to statutory certainty.
The bill is expected to be voted on during the House Financial Services Committee’s markup on June 10, 2025, with lawmakers aiming to pass it before the August recess. This ambitious timeline reflects the growing urgency among policymakers to establish regulatory clarity for digital assets, following President Trump’s directive to have the bill on his desk by August.
What does this all mean for ETF Issuers who wish to add staking to their products?
- The SEC’s guidance is non-binding but positive and it suggests protocol staking alone doesn’t make something a security.
- We’d like to see legislators address securities considerations around staking formally in the Clarity Act
- Even if the SEC allows ETF issuers to add staking to their products involving proof-of-stake tokens before new laws pass, we still need to solve the income pass through problem created by using a grantor trust for tax exempt status.
- On May 30, U.S. ETF registration statements were filed that may have solved for this tax implication by attempting a C-corporation structure, but the SEC responded with ongoing concerns about the proposed structure and whether it would qualify as an ETF.
Moving Forward
The regulatory environment for staking is evolving rapidly, and largely in the right direction. We’re seeing thoughtful engagement from regulators who are taking the time to understand the technical mechanics of what we do. We’re seeing legislative momentum that could provide the statutory clarity the industry has long sought.
Most importantly, we’re seeing validation of the compliance-first, non-custodial approach that Figment has maintained from day one. The regulatory framework that’s emerging isn’t forcing us to change how we operate and it’s confirming that we’ve been operating correctly all along.
As we head to Washington this week, we’ll be carrying these developments forward in our conversations with policymakers. The goal remains the same: ensuring that staking remains accessible, secure, and aligned with both legal and technical best practices for our institutional clients.
