The Crypto Council for Innovation has reached out to the U.S. Securities and Exchange Commission (SEC), advocating for the deregulation of staking, as outlined in a letter dated April 30 from the public policy group to the federal authority.
New Letter To SEC Advocates for Staking Without Regulation
In a letter supported by over 30 cryptocurrency organizations, the group is requesting that the SEC recognize staking as a “technical process” rather than an “investment activity.”
Moreover, the Crypto Council for Innovation is requesting that the regulatory body establish clear guidelines for staking, avoiding overly rigid rules that could hinder market dynamics and innovation within this sector.
“Staking isn’t niche—it’s fundamental to the decentralized internet,” the Crypto Council for Innovation stated in a post on X. “It secures networks, enhances decentralization, and enables developers to innovate the next phase of applications on PoS blockchains.”
“Every major discussion about crypto regulation (including stablecoins) involves staking,” the organization emphasized. “We need to get this right.”
Understanding Staking
Staking happens when investors lock their cryptocurrencies with a blockchain validator and earn rewards for their participation, assisting in transaction validation and network security.
The Crypto Council for Innovation argues that, since rewards are generated directly from the blockchain protocol, staking should not be classified as securities transactions.
Additionally, the organization is asking the SEC to provide straightforward guidelines for significant participants in the staking arena, similar to the agency’s recent statement regarding proof-of-work mining.
“The industry has united in a clear message: staking is not a securities activity, and treating it as such would compromise network security, hinder innovation, and weaken U.S. competitiveness in the digital asset market,” the letter concludes.
Given the rapidly evolving landscape of cryptocurrency regulations, it may soon be necessary for the SEC to redefine the processes surrounding earning rewards.
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