Staked Ether Receipts Not Securities, SEC Staff Guidance Says

Tokens received from staking ether are not considered securities, according to fresh guidance from staff at the US Securities and Exchange Commission (SEC), provided they operate solely as receipts.

Published on Friday by the SEC's Division of Corporation Finance, the guidance arrives about three years after the regulator extracted a $30 million payment from a crypto exchange linked to staking activities.

SEC Staff's Stance on Staked ETH

Staking involves locking cryptocurrency to support blockchain operations, earning rewards in return. Liquid staking providers issue a tradable token representing the locked coins.

Securities are subject to registration and disclosure requirements. The Howey test, established by the Supreme Court in 1946, determines if buyers anticipate profiting from the efforts of others.

The SEC's FAQs define a staking receipt token as a "digital tool" provided the underlying coin qualifies as a digital commodity. A joint interpretation on March 17 by the SEC and CFTC listed 16 digital commodities, including Ether (ETH), which was trading near $2,685 at the time.

Staking's Journey From SEC Target to Staff Approval

Kraken paid $30 million and halted its US staking service in February 2023 to resolve SEC allegations. The regulator claimed Kraken had promoted annual returns of up to 21%.

"Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws," then-SEC Chair Gary Gensler said in a warning.

The SEC filed a lawsuit against Coinbase four months later, labeling its staking service an unregistered securities offering. That case was dismissed by the agency in February 2025.

Subsequent staff statements in May and August 2025 clarified that neither protocol staking nor liquid staking constitute securities offerings.

The Single Condition: Token Must Function as Receipt

The crucial detail lies in the staff's definition of a receipt. The token must not alter the rights tied to the staked ETH or introduce additional rewards.

Providers are prohibited from lending, pledging, or reusing the deposited coins. Additionally, the token cannot determine or lock in rewards—a key distinction from Kraken's practice of advertising its own return rates.

The approach drew dissent within the SEC. Commissioner Caroline Crenshaw argued that the August 2025 liquid staking statement was based on assumptions that might not align with real-world operations. She named her response "Caveat Liquid Staker."

The FAQs also addressed token buybacks, where a project uses its funds to repurchase its tokens from the open market. For a functioning network, a buyback announcement does not constitute a promise that would classify the token as a security. But on an incomplete network, marketing a buyback as a method to generate returns might still trigger security classification.

The FAQs note that they lack binding legal authority. This fact carries added weight since the Clarity Act, a proposed law to divide crypto regulatory duties between the SEC and CFTC, failed to pass the Senate this month.

BeInCrypto reported in March that analysts believed regulators had already fulfilled much of the legislation's objectives. The analysis highlighted a vulnerability: guidance, unlike statutory law, can be revoked by a subsequent administration.