The U.S. Securities and Exchange Commission's Division of Corporation Finance published guidance on staked ethereum tokens, stating that such tokens are not securities when they operate purely as receipts for locked cryptocurrency.
The guidance follows a period of heightened SEC enforcement against cryptocurrency staking services. In February 2023, crypto exchange Kraken agreed to a $30 million settlement and ceased its U.S. staking operations after the SEC alleged it had advertised yearly returns as high as 21%. Four months later, the SEC sued Coinbase over its staking program, characterizing it as an unregistered securities offering. The agency withdrew that case in February 2025.
Key Conditions for Staking Receipt Tokens
According to the SEC staff FAQs, staking receipt tokens qualify as digital tools rather than securities when the underlying cryptocurrency is classified as a digital commodity. The SEC and the Commodity Futures Trading Commission designated ether as a digital commodity in a March 17 interpretation.
The guidance imposes strict conditions. Staking receipt tokens must not alter the rights attached to the staked ethereum or provide additional rewards beyond what the protocol generates. Providers cannot lend, pledge, or reuse deposited coins, and they cannot set or fix reward amounts—distinguishing compliant arrangements from Kraken's model, which advertised its own return figures.
Ongoing Debate
Not all SEC commissioners support the approach. Commissioner Caroline Crenshaw raised concerns that the guidance relies on assumptions that may not reflect how staking programs actually operate.
The SEC staff also addressed token buybacks, determining that on a functioning network, buyback announcements do not constitute promises that would classify tokens as securities. On networks still under development, however, marketing buybacks as a return mechanism could trigger securities classification.
The guidance carries no legal force, as FAQs issued by SEC staff are advisory rather than binding rules. Observers have noted that guidance can be withdrawn by future administrations.
